The Solution Provider’s Perspective

Leading industry suppliers offer their unique point of view on trends and advancements shaping cold storage design and construction.

Three leaders with expertise in the supplier and solution provider segments of temperature-controlled construction share their perspectives with COLD FACTS on topics ranging from the vast potential of AI to the uncertainties created by tariffs and trade riffs.

Trade Disruptions

“I don’t like disruptions to trade,” says Bob Tippmann, President, QuickFreeze. “The very public nature of the tariff negotiations are frustrating because nobody knows what to expect. Consequently, there’s a rush to get product across the Mexican and Canadian borders, not knowing where we would land on all these different tariff issues.”

On the other hand, Tippmann says he was very excited about the prospect of reciprocal tariffs, and he thought it was great that other countries would be encouraged to lower their own tariffs. Then the reality of the reciprocal numbers settled in. “I remember vividly that there was a 30% tariff on the product that we’re shipping, and the reciprocal tariff was 10 or 12%,” he says. “It turns out the tariff rate was based on a trade imbalance. A great idea – I only wish the implementation had been more precise.”

Trade uncertainty affects future capacity but risk can be minimized through flexible design, says Todd Steffen, SIOR, Partner/ Market Leader at industrial real estate experts KBC Advisors. “Planning for expansion now provides you with the flexibility to take advantage of opportunities as they arise,” he says. “For instance, port regulations could shift to change portside capacity needs. Economics may also change in an effort to avoid tariffs.”

As an equipment builder, Brian Kelly, Vice President of Refrigeration at Mayekawa USA, Inc., says they have noticed that vendor lead times have not come back to “normal” preCOVID lead times and delivery. “The lead times are still extended to this date and impact various items such as motors, starters, velocity frequency drivers, and valves,” says Kelly. “Tariffs have not negatively impacted lead times, however, the tariffs have increased costs on the project budget.”

Impactful Trends

As he is mainly concerned with blast freezing equipment, a trend that Tippmann really likes is warehouses designed so that the blast freeze equipment is located in the warehouse portion of the building, rather than in a separate room.

“They’re able to install that equipment at floor level instead of trying to go five or six levels high with dangerous-to-handle pallets that aren’t shrink-wrapped because they’re being frozen,” Tippmann says. “Being able to do it all at floor level is something that I see everyone adopting.”

Steffan believes the adequate power needed to fuel cold storage will be dwarfed by the data center, which traditional technologies will not be able to support. “We will need to expand power and infrastructure to include analyzing transportation data and modeling other factors so that the right decisions can be made on where to locate capacity.”

Kelly notes, “Internet of Things (IoT) sensors can monitor equipment and read in real time, vibration, temperature, and power usage data. You can log data in cloud servers and send alerts via SMS in real time to plant operators and management in the event of an alarm or failure.”

Of the sensors in the market, the one that Tippmann is most excited about is infrared. “About six years ago, I plugged in some infrared cameras for the first time and started looking at the temperature readings from an analytical point of view to see how we could apply that in the freezer,” Tippmann says. “I determined that while I was able to sense the freezing of a pallet with this infrared camera, the amount of data required to make a universal sensor know when a pallet was frozen was about the equivalent of the number of pallets that are frozen in the United States each year. It was unattainable.”

That’s why Tippmann is excited about smaller AI programs like one purpose-built for infrared. “We’ve been getting really great results with a much smaller data set.”

Keeping Up With AI

“Artificial intelligence and the Internet of Things are being implemented, and it is very exciting for our industry!” says Kelly. “AI and machine learning are analyzing trends to predict when a piece of equipment is likely to fail or alert when performance starts to degrade before any negative impact on the system, such as downtime, occurs.”

Kelly says the potential return on investment is in fewer unplanned outages and unnecessary service, extended equipment life, product loss prevention, and regulatory compliance.

When it comes to site selection for cold storage construction, Steffan says design should be based on where capacity is needed. “You identify sufficient pools of cold food production in frozen and chilled sectors and analyze everything, including transport costs to cold storage facilities. This is the information needed to make the design successful.”

Today, AI models can identify current food production locations and can also analyze future cold food pallet locations, Steffan says. “Consider the time needed to design and construct a cold storage facility and look ahead five years – you need to design for the capacity required then.”

Steffan says it’s compelling when industry peers who have been around for 30 years say this kind of insight just wasn’t around before, at least not the whole picture.

At this stage, Tippmann’s experience with AI is trust but verify. “Sometimes it seems like a little bit of a mystery black box that you feed data into, and most of the time it comes back,” he says. “But you need to build in safeguards, and you need to design for the times when AI just straight up lies to you.”

Tippmann advises keeping that in mind when designing or employing products that utilize AI technology, especially when applied to something as important as the safety and security of a nation’s food supply.

State of the Market

“When it comes to the potential of what AI can do, I don’t know that even Elon can see 24 months ahead. If you look at where AI was 24 months ago and where it is today, it’s night and day,” says Tippmann.

“With the advances in technology over the past five years, we can get very good results with a much smaller data set. I can make good decisions with less input through AI today than I could five years ago with machine learning,” says Tippmann. “And that’s directing the development of the equipment that we’re designing and building now for smaller AI programs like the one purpose built for infrared that we’re excited about.”

“Buildings today must be leased to generate a profit for the developer, rather than competing with an existing facility. Add 8,000 square feet that’s not necessarily justified, and you have a blood bath of pricing wars versus location,” says Steffan. “That is the crux of where to put capacity. You must match capacity design with the needs of the market, whether producing for export or importing.”

Steffan says what interests him is the relationship between food producers and 3PLs. “There is a real opportunity for those two groups to come together, to discuss future production and capacity needs, and talk strategically about where capacity might really be needed.”

“I think that for a while during COVID, we seemed pretty indispensable with all the media coverage of the cold chain delivering vaccines, and the demand from food producers to expand their stores,” says Tippmann. “I believe all that attention really put our industry in the spotlight, drawing in people who didn’t know what they were doing and will likely cause us problems in the future.”

Tippmann says he doesn’t know when the recovery will be over from all that overbuilding.

“There are still a few markets that have a lot of capacity to store pallets, and there’s still going to be recovery in a couple of those markets that were very attractive three years ago and now are sitting at 50% capacity,” Tippmann says. “But luckily, people are going to continue to eat food. So, I think it’ll be all right.”

Media Contact

For media inquiries, please contact: Lindsay Shelton-Gross, Senior Vice President, Global Communications, Marketing and Strategic Initiatives, Global Cold Chain Alliance.