Consumers Catch Cold

Growing consumer demand in the United States is impacting the storage and distribution of frozen foods and other products that depend on cold environments, finds the Thomas Index Report.

The report examines the shift to buying groceries online during the pandemic, as consumers embraced online ordering and fully filled pantries and freezers. The increased demand for frozen foods means distributors need more refrigerated trucks to handle the available goods and more space in cold storage warehouses to store them.

As a result of this demand, freight rates are going up. In March 2022, it cost $4.97 per mile to ship goods by refrigerated truck, a striking jump from $2.93 in early 2020. If demand continues to climb, it could exceed available capacity and drive prices up more starkly.

In response, a growing number of third-party logistics providers plan to expand their cold storage capacity in the coming months, building new facilities and acquiring more cold storage warehouses. The growth in cold storage aligns with overall growth in the storage and warehousing sector. The average availability of U.S. warehouse space dropped from 8.5% in the first quarter of 2016 to a mere 5.6% in the first quarter of 2021, says real estate firm CBRE Group.

Meanwhile, U.S. warehousing and storage companies have added 420,000 new jobs to accommodate the increased work they are bringing in, reports the Bureau of Labor Statistics.

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