Sometimes, the more things change the more things remain the same. United States Cold Storage (USCS) still operates one of the United States’ largest public refrigerated warehouse (PRW) networks. Despite recent economic turmoil, it thrives.
The recent recession hasn’t changed this New Jersey-based organization’s position as one of the leading PRW companies that serves major customers in the refrigerated and frozen food industry. While the company provides customers with a big chill, there’s a significant economic thaw, reports Dan Harvey.
The New Jersey-based United States Cold Storage (USCS) boasts one of the United States’ largest public refrigerated warehouse networks – housed with state-of-the-art equipment that services the refrigerated and frozen food industry. Good thing – as clients within the industry have complex needs that require an organization such as USCS to deliver on-the-spot and on-time solutions.
When we last checked in with USCS, we found this service-driven organization continually and readily confronted clients’ complicated logistics. Nothing about that has changed. What has changed is the economic and industry landscape – in a five-year period that flew as fast as a jet plane. But USCS kept up the pace. And that leads into discussion of another change. Mark Lorion, vice president of business development and marketing, brings us up to date. “We’ve grown a bit,” he modestly concedes. “We now have 35 facilities nationwide and in terms of production, we now measure more than 210 million cubic feet of space.”
No need to be modest about that. But growth came with challenges. “The biggest challenge was trying to throttle back from a growth mode that we had been in, prior to the economic slowdown, finishing projects that we had in the works, and waiting until the economy improved,” relates Lorion. “Now we are back into a more aggressive growth mode, again.”
Indeed, again – for this company has always been aggressive when pursuing growth.
USCS and its several predecessor companies have provided refrigerated storage services to the food industry since 1889. The company became a wholly owned subsidiary of the United Kingdom and Hong Kong-based Swire in 1982. Swire was founded in the UK in 1816 and now has substantial investments in refrigerated warehousing, shipping, road transport, soft drink manufacturing, aviation, property development and trading in the United States, Australia, Asia and the United Kingdom.
So USCS has roots that date back more than about 150 years, and throughout its history the company has always embraced innovation via deployment of the latest available technology. In recent years, this translates into offering clients the most cost-effective storage and distribution coverage possible. That’s how USCS garnered a client list that includes a large number of the major food companies in the United States. When you talk about frozen and refrigerated foods, you’re looking at items such as ice cream, yogurt, and other dairy products; as well as packaged food such as seafood and frozen food entrees. It’s an encompassing gamut that also includes vegetables and fruit that come straight from the fields and are frozen for later use, as Lorion indicates.
Swire, a family owned operation, employs more than 125,000 people worldwide, while USCS employs over 2,000 in the United States. “The relationship provides economic advantages, whereas other PRW companies confront issues related to banks and stability,” says Lorion. “Conversely, we have numerous advantages, such as longevity of personnel, who are dedicated to helping USCS be a best- in-class provider in our industry. We have developed advanced warehouse management systems, transportation management systems, and personnel training. We keep our resources – the facilities and people – up to date.”
That means our facilities are kept fully maintained. “We don’t cut back on maintenance,” reports Lorion. “Some companies face problems when keeping personnel and dedicating funds toward upkeep and repair, and adding new buildings as needed. We are aggressive in such areas, and that provides us with a definite advantage.”
The companies’ 35 locations – and its 210 million cubic feet of temperature controlled warehouse and distribution space – spreads across 12 states, including California, Delaware, Florida, Illinois, Indiana, Nebraska, North Carolina, Pennsylvania, Tennessee, Texas, Utah and Virginia. This network serves its customer base with requirements ranging from primary storage to fully-integrated third-party logistics solutions. Further, USCS – which is ranked as one of the top five largest PRW companies in the United States – is an integral part of global food distribution and supply chain. More than 35 percent of goods it handles go toward international use or consumption. “We serve many of the major food companies, their subsidiaries and their regional needs, so we interface with most of the major food companies, one way or another,” relates Lorion.
Broad Gamut of Services
USCS provides each client with what is required to meet their unique needs: proper storage and handling, as well as a long list of value-added services. As it is a PRW (public refrigerated warehouse company), USCS stores products for food companies and works with them to provide the necessary logistics.
That translates into services such as inventory control and transportation services. No client problem is too complex to effectively address. USCS offers clients computerized management information systems, USCS Logistics freight consolidation for distribution, USDA inspection facilities, import/export services, customized services and rates, transloading, EDI communications, and eUSCOLD ® Internet services that provide 24/7 access to account information.
Transportation Focus = Cost Efficiency
One of USCS’s major pushes has been tailoring transportation programs and capabilities toward customer needs, which translates into reduced costs. The comprehensive transportation service program services local, regional and national distribution via the Transportation Management Group.
The internal grouping involves a proprietary transformation management system (USCS TMS) that effectively plans and monitors the hundreds of shipping activities occurring at its nationwide facilities each day. The USCS TMS system enables the company to provide the most effective outbound freight consolidation service, truckload management programs, freight-rate analysis and distribution network analysis and optimization.
Optimization involves taking customers’ orders and running them through an optimizing software program that creates scenarios that demonstrate which warehouse location might best serve a client’s customer base. This engenders cost efficiency.
Essentially, USCS advances a supply-chain solution that addresses each customer’s unique challenges. USCS’s mission is to provide the right – and most innovative – solution to enable clients to get their products to the right place at the right time, and in the most safe, secure, and cost-efficient fashion.
“We also address customer and industry need, as far as pace, which means anticipated growth and need for more space,” describes Lorion, adding that a growth plan is good in the long run. “At first, we thought that there would be a lot of companies reducing inventories. That will always happen, in some degree, within a recession, but at this point, we seem to be pulling out of the recession, inventories are increasing, and warehouse space, across the country, is rather tight, currently. So there’s a need.”
Growth: In a Good Position
As far as growth, USCS finds itself in a very favorable position, reports Lorion. “Because we are privately owned, we’re able to grow at the rate we would like, independent of other outside financial concerns. We can be a bit more nimble, as we are not publicly traded or owned by banks,” he says.
He points to an example that underscores the company’s health in terms of growth: “We just finished a project in Nebraska [Omaha] where we tore down half of an older warehouse and rebuilt on the same footprint, then transferred product into the new warehousing portion. We plan to demolish the other half and build more space, so it’s a two-phase reconstruction project somewhat different than our typical approach. Usually, we have started new, but the hurdles of buying land, with the associated fees, compelled us to expand and rebuild in an existing region.”
This has led to important new direction for the company – and that really doesn’t take USCS far from home. “We look at where we have existing facilities and customer bases, and if we are getting more demand from the same customers, we can review options for additions or new land,” says Lorion. “If we don’t have any more land available at an existing location, sometimes we will move another 10 or 20 miles away, expanding our capacity for other manufacturers.”
But that in no way limits the company. “While we tend to have a regionalized focus, we always look for new opportunities to go into market areas where we don’t have a current location, to make ourselves more marketable,” says Lorion. “Expect to see new locations, as we continue opening up new sites in the next few years.”
That emphasizes the company’s inherently forceful nature. “We’ve become much more aggressive in this direction compared to others in the industry,” says Lorion. “This comes in part from the fact that customers are asking us to do more for them. And we respond.”
But this is not something that overwhelms the company. “Rather, we consider it a good opportunity to build and, in turn, grow,” says Lorion. “We know where the business is coming from.” Lorion adds this to the future glimpse: “A lot of companies have held on to cash, waiting to see what happens with things such as ‘health care’ and changes in tax laws. We’ve gained a greater comprehension. We find that, for the most part, people are optimistic, and we believe we are heading in the right direction.”
But the optimism is cautious. For now, we’ve worked through some pretty tough economic times, waited for signs of recovery and opportunities await. Here’s the main point for USCS: The food and agricultural sectors of the economy is improving, and that bodes well for our company.”
Indeed, USCS’s grasp of the current business and economic situation, and its effective response, must be chilling to the competition.