Cryo-Trans and Lineage Logistics - Novi

[Sean N]

Lineage Logistics puts cold storage on rails with acquisition
Gillian Tan
https://www.crainsdetroit.com/mergers-a ... 7-headline

Deal is valued at more than $500 million
Acquisition will allow Lineage to lower customer transportation costs
Deal marks more than 40 acquisitions for the firm in roughly a year

Lineage Logistics
A Cryo-Trans refrigerated rail car. Novi's Lineage Logistics acquired the company in early January.
Novi-based cold-storage warehousing company Lineage Logistics LLC is branching into rail.

Lineage announced this week it acquired Cryo-Trans, an owner of refrigerated and insulated railcars, to capture an additional leg of the food and beverage supply chain. The transaction values Reisterstown, Maryland-based Cryo-Trans at more than $500 million.

"A move into rail is part of our effort to be a one-stop-shop for our customers and eliminate waste within the food supply chain," Lineage CEO Greg Lehmkuhl said in an interview. By replacing some trucking capacity with rail, customers may reduce transport costs by 15 percent to 40 percent, depending on the shipment size and distance traveled, he estimated.

Already, roughly 90 percent of Cryo-Trans customers are part of Lineage's network. Lineage will seek to partner with its existing customers so that, for example, railcars transporting frozen French fries from the Pacific Northwest to Southeastern states are packed with poultry for the return trip.

Lineage, a real estate investment trust, operates more than 330 temperature-controlled warehouses, spanning almost 2 billion cubic feet of storage capacity across 15 countries. It provides other services including last-mile delivery, freight consolidation and port logistics.

About one-third of all refrigerated foods consumed in the U.S. pass through at least one of Lineage's warehouses. And COVID-19 produced greater opportunity as consumers shifted dining habits away from restaurants, buying almost all of their food from grocery stores. The bulk of Lineage's business is distribution to markets. So while restaurant distributors like U.S. Foods suffered, Lineage thrived.

As part of Lineage, Cryo-Trans will keep executing on its mission of "protecting today's perishables for tomorrow," CEO Herman Haksteen said in a statement. Cryo-Trans owns more than 2,200 railcars, which it describes as the largest private fleet in North America, and its real-time technology facilitates tracking of more than 40,000 annual rail shipments.

During 2020, Lineage made 39 acquisitions to the tune of $3.6 billion — or a pace of one acquisition every nine days through the year. The acquisitions added 130 warehouses in 10 countries to the company's portfolio and 5,000 new employees.

In September, Lineage raised $1.6 billion from investors including Oxford Properties Group, BentallGreenOak and Dan Sundheim's D1 Capital Partners in a transaction that values it at $15.5 billion, including debt.

The acquisition activity and growth in 2020 made Lehmkuhl a Crain's Newsmaker of the Year honoree.

Lineage's rail bet is divergent from the tack taken so far by Americold Realty Trust, its publicly traded rival.

"We do not set out to go buy transportation companies," Americold CEO Fred Boehler said on a November earnings call, acknowledging though that the provision of transportation services "creates stickiness" for warehouse customers.

— Crain's Senior Reporter Dustin Walsh contributed to this report.

[SW]

The Novi location is off West Park Rd., south of West Rd., just south of the CSX (now LSRC) tracks. It appears they do not get rail service (or even have a spur) at this time.
https://www.bing.com/maps?&ty=18&q=line ... 9&v=2&sV=1

[Sean N]

The Novi location is just the headquarters, not sure where any warehouses are located

[AARR]

IIRC some of these newer rail served cold storage warehouses can unload whole trains at a time

[LansingRailFan]

IIRC some of these newer rail served cold storage warehouses can unload whole trains at a time

I saw something once on history channel about a UP produce train from out west and the entire thing was loaded like a unit train. Very impressive.

Supply chain and logistics is my background. Lineage is a big player in the grocery/food biz.

[NS3322]

I saw something once on history channel about a UP produce train from out west and the entire thing was loaded like a unit train. Very impressive.

Supply chain and logistics is my background. Lineage is a big player in the grocery/food biz.

Oh yes, that would be the "Extreme Trains" program. A real shame that it was not given a second season, it just needed to be retooled a bit.
https://www.youtube.com/watch?v=sCux98Zbs0k

UP surprisingly ended their Railex/Cold Connect service back in May 2020.
https://www.railwayage.com/freight/clas ... d-connect/

[Super Chief]

Glad to see something work. Fresh solutions hasn't generated much for Grand Elk, CSX Cold Express has never got started from Tampa to Kingsbury In. Railroads have a lot to offer if they could just work it out.

[mach69]

Looking closely at Google Maps imagery it seems like the Lineage Loticstics building used to have a spur, it just got removed. Are you sure they're gonna be a new customer, or are they just returning to rail?

Also from Google Maps I also found what looks to be another abandoned spur just east of the Toyota Boshoku building in Novi. Any idea of who that customer was and what they received?

[DaveO]

Looking closely at Google Maps imagery it seems like the Lineage Loticstics building used to have a spur, it just got removed. Are you sure they're gonna be a new customer, or are they just returning to rail?

Also from Google Maps I also found what looks to be another abandoned spur just east of the Toyota Boshoku building in Novi. Any idea of who that customer was and what they received?

That's the Lineage HQ. Never a rail spur for them or Toyota.
That general area until relatively recently was undeveloped wetlands.