CPKC, Americold exploring co-development opportunities in Mexico

Rhea-AI Summary

CPKC and Americold Realty Trust announced plans to explore co-development opportunities in Mexico, expanding their strategic collaboration in temperature-controlled logistics across North America. The partnership, established in June 2023, combines CPKC's single-line intermodal freight transportation and TempPro™ containers with Americold's cold chain expertise.

The companies are already developing a 335,000-square-foot, $127 million import-export hub at CPKC's Intermodal Facility in Kansas City, scheduled to open mid-2025. CPKC recently added 1,000 new refrigerated containers to its fleet, enhancing its Mexico Midwest Express service. Americold plans to invest between $500 million and $1 billion over the next 5-10 years in development projects with CPKC and DP World.

Positive

• Development of $127M import-export hub in Kansas City
• Fleet expansion with 1,000 new refrigerated containers
• Planned investment of $500M-$1B over 5-10 years
• First single-line rail service for refrigerated shipping from Midwest to Mexico

Negative

• None.

Insights

Supply Chain Analyst

The strategic collaboration between CPKC and Americold represents a significant advancement in North American cold chain logistics. The planned co-development in Mexico, following their $127 million Kansas City facility, signals a major expansion of temperature-controlled infrastructure. With Americold's planned investment of $500 million to $1 billion over the next decade, this partnership is poised to transform cross-border cold storage transportation.

CPKC's doubling of its refrigerated container fleet with 1,000 new units, combined with their Mexico Midwest Express service, creates a compelling alternative to traditional trucking routes. This integrated rail-storage solution could significantly reduce transportation costs and delivery times while improving reliability in the temperature-sensitive goods market between the U.S. and Mexico.

Financial Analyst

This expansion strategy positions both companies to capture a larger share of the growing cross-border trade market. For CPKC, the partnership enhances asset utilization and creates new revenue streams through their expanded refrigerated container fleet. The collaboration with Americold could drive significant long-term value by reducing empty container movements and improving network efficiency.

Americold's substantial investment commitment of up to $1 billion demonstrates strong confidence in the partnership's potential returns. The Mexico expansion could provide access to new customer segments and create additional recurring revenue opportunities. The strategic focus on optimizing temperature-controlled logistics should help both companies establish a competitive advantage in the lucrative cross-border perishables market.

CALGARY, AB, Dec. 12, 2024 /PRNewswire/ - Canadian Pacific Kansas City (TSX: CP) (NYSE: CP) (CPKC) and Americold Realty Trust, Inc. (NYSE: COLD) today announced plans to formally explore co-development opportunities in Mexico as part of their continued strategic collaboration focused on optimizing temperature-sensitive commodity flows between the United States, Mexico and Canada.

Americold and CPKC established a strategic collaboration in June 2023 to optimize temperature controlled logistics across North America. CPKC connects North American markets with single-line, expedited intermodal freight transportation and a fleet of TempPro™ temperature-protected intermodal containers for reliable door-to-door transit competitive with over the road trucks. Americold is a global leader in temperature-controlled logistics and its cold chain ecosystem plays an integral role in the food supply chain connecting production, distribution and consumption for many of the largest food companies in the world.

In February of this year, Americold announced plans for its first development with CPKC at their Intermodal Facility in Kansas City, Mo., and broke ground on the 335,000-square-foot, $127 million import-export hub in June. The new facility is planned to open mid-2025 and will support both importers and exporters of temperature sensitive food between Mexico and the United States.

"Our strategic partnership with CPKC creates a platform that will deliver significant and sustainable supply chain value for existing and new customers in North America," said George Chappelle, chief executive officer at Americold. "Exploring opportunities in Mexico is a natural continuation of this collaboration as we look at ways we can attack inefficiencies in the current cold chain."

"We are excited to build on our successful strategic collaboration with Americold with new facilities in Mexico as we leverage the unrivalled reach of our North American network to support the cold storage supply chain," said Keith Creel, CPKC President and Chief Executive Officer. "That network, combined with our premium intermodal services moving one of the largest fleets of refrigerated containers in the industry, and this growing collaboration with Americold, continues to create new transportation options for our customers shipping a range of food and other products across North America."

Last year, CPKC announced the addition of 1,000 new 53-foot refrigerated intermodal containers to its network, more than doubling CPKC's existing fleet and bringing more shipping options to customers using the expanding Mexico Midwest Express (MMX) premium intermodal service. MMX is North America's first single-line rail service offering for refrigerated shippers from the Midwest to Mexico, a market currently served by trucks.

Americold plans to invest between $500 million and $1 billion over the next five to 10 years in development projects with CPKC and its other strategic partner DP World.

About Americold Realty Trust, Inc.
Americold is a global leader in temperature-controlled logistics real estate and value-added services. Focused on the ownership, operation, acquisition, and development of temperature-controlled warehouses, Americold owns and/or operates 239 temperature-controlled warehouses, with approximately 1.5 billion refrigerated cubic feet of storage, in North America, Europe, Asia-Pacific, and South America. Americold's facilities are an integral component of the supply chain connecting food producers, processors, distributors, and retailers to consumers.

About CPKC
With its global headquarters in Calgary, Alta., Canada, CPKC is the first and only single-line transnational railway linking Canada, the United States and México, with unrivaled access to major ports from Vancouver to Atlantic Canada to the Gulf of México to Lázaro Cárdenas, México. Stretching approximately 20,000 route miles and employing 20,000 railroaders, CPKC provides North American customers unparalleled rail service and network reach to key markets across the continent. CPKC is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise. Visit cpkcr.com to learn more about the rail advantages of CPKC.

View original content to download multimedia:https://www.prnewswire.com/news-releases/cpkc-americold-exploring-co-development-opportunities-in-mexico-302330249.html

SOURCE CPKC

FAQ

What is the value of CPKC and Americold's new Kansas City facility?

The new import-export hub at CPKC's Intermodal Facility in Kansas City is valued at $127 million and spans 335,000 square feet.

When will CPKC's new Kansas City facility open?

The new facility is planned to open in mid-2025.

How many new refrigerated containers did CPKC add to its fleet?

CPKC added 1,000 new 53-foot refrigerated intermodal containers to its network.

How much does Americold plan to invest in development projects with CPKC?

Americold plans to invest between $500 million and $1 billion over the next five to 10 years in development projects with CPKC and DP World.

When did CPKC and Americold establish their strategic collaboration?

CPKC and Americold established their strategic collaboration in June 2023.