Cold or refrigerated storage is a specialized industrial real estate product type which plays an important role in the global cold chain and greater worldwide supply chain. As the name would imply, cold storage is simply the storage of goods at temperatures less than ambient. Cushman & Wakefield’s Los Angeles based team of Mike Foley, Ryan Bos, and I specialize in the sale and lease of cold storage facilities throughout North America and are active participants in Cushman & Wakefield’s Food & Beverage group. In this post I cover the basics of cold storage from an our “broker” perspective. I review the cold storage features most commonly of interest to cold storage users and property owners when they evaluate cold storage facilities. If you would like to learn more detail about any of the features below, please reach out to us. I also have usually included a link to a relevant website with more information in each section.
Cold storage facilities are located in areas where refrigerated storage is in demand. A recent report from a competitor of C&W mentioned that cold storage facilities tend to be located near food production and population centers. I would add ocean and air ports of entry are also an important location consideration as many goods requiring refrigeration are imported and exported on a global basis. Common products stored in cold storage facilities include food-related products, pharmaceuticals, and even some consumer goods like camera film and lipstick. The vast majority of cold storage is designed and constructed for agricultural and processed food products.
According to the USDA, U.S. total refrigeration storage capacity is 3.6B cubic feet in 950 warehouses as of October 1, 2017. This capacity is highly concentrated in top five states with the most refrigeration capacity. Together they account for almost 40% of all U.S. cubic capacity. California has the most refrigeration storage capacity with 396M cu. ft. or 11% of U.S. capacity, while Washington (217M or 8%), Florida (259M or 7%), Texas (231M or 6%), and Wisconsin (228M or 6%) round out the top five.
The largest cold storage provider in the U.S., Americold, has 14 locations in California alone encompassing almost 70M cubic feet and 1.9M square feet of refrigerated space. 9 of Americold’s 14 California locations are in Southern California while the remaining 5 are located in the Salinas and Central Valleys, some of the largest agricultural areas in the world. Americold’s California portfolio exemplifies the typical cold storage location criteria; close to the large population center and ports of Southern California and the large agricultural growing areas of Northern California.
Cold storage facilities are not homogeneous. Despite the varying features and layouts, there are generally two main types of cold storage facilities; the purpose-built cold storage facility and the dry conversion facility, also known as box-in-box. A purpose-built cold storage facility is usually a build-to-suit for a user and specifically designed to meet the user’s cold storage needs. There may be ambient areas of a purpose-built facility, but the cold storage amenities will be incorporated into its construction.
Conversely the dry conversion facility was originally an ambient warehouse which was converted, by way of the addition of cold storage features, into a cold storage facility. Dry conversion facilities are often less than 50% cooler/freezer and typically are a better option for companies with significant ambient requirements and smaller cold storage requirements.
The heart of the cold storage facility is the refrigeration system. The refrigeration system is usually labeled by refrigerant it uses. There are typically two different categories of refrigerants used by most cold storage refrigeration systems; anhydrous ammonia and Freon, a trademarked catch-all name for a number of halocarbon products including older R-22 and newer R134a, R-507, R-404A, R-407C and R-410A. Each system has relative cost, efficiency, safety, and environmental qualities and it is important for cold storage participants understand how each refrigerant suits its requirements.
Ammonia and Freon systems have distinct differences in terms of cost and efficiencies. Compared to Freon, ammonia refrigerant is typically cheaper running about 2.5 times less than R22 and 7 times less than R134. Operation costs in ammonia systems are 20-30% lower than R22, compressors are usually more efficient and high heat transfer coefficients (R values) in equipment is usually better with ammonia versus Freon. However, efficiency savings may depend on temperature ranges. With low food freezing temperatures between -30 and -45 degrees F, Freon may be more efficient than ammonia due to less expensive compressors and lower compression energy.
Despite the cost and efficiency savings of ammonia in most systems, some cold storage users and property owners avoid ammonia systems due to its reputation as being dangerous. Although ammonia is categorized as a non-flammable gas by the DOT and explosions are extremely rare, when there have been ammonia explosions they can be catastrophic when the ammonia gas has been allowed to build up to substantial levels. Such levels are unlikely in operating cold storage plants because leaks of ammonia are self-alerting. The presence of the gas is very noticeable due to is pungent odor.
Cold storage users concerned with their environmental impact may take a closer look at the type of refrigerant being used in their cold storage facilities. Some Freon gases such as R22 are ozone depleting and, under the U.S. Clean Air Act, are being phased out. Newer Freon gases, such as R134a, are not ozone depleting but do have global warming potential. Ammonia is not ozone depleting and has no global warming potential.
The design of any refrigeration system, including those used within cold storage facilities, is to move heat from a low-temperature reservoir to a high-temperature reservoir to achieve a temperature below the surrounding ambient temperature. In cold storage facilities, refrigeration systems typically consist of compressors, piping, condensers and receivers, expansion and control valves, evaporators, monitoring systems, and temperature controllers. A good video overview of an ammonia cold storage refrigeration system can be seen by clicking here and a Freon (410a) by clicking here.
If the heart of a cold storage facility is the refrigeration system, the element which makes it tick is the compressor. The compressor’s function in the refrigeration system is to take cool, low-pressure refrigerant and compress it into a vapor at much higher temperatures. Here is a good site to understand how compressors function within a refrigeration system. Compressors can be generally categorized into reciprocating, scroll, screw rotary and centrifugal types and have either hermetic (closed and sealed), semi-hermetic (can be opened for repairs), or open types.
As with any system that moves fluids and vapor, piping is an important component of the refrigeration system. Low quality and poorly designed piping can lead to significant issues throughout the refrigeration system of a cold storage facility. Most pipes are made of steel, especially where ammonia is used as a refrigerant. Ammonia based systems cannot use components made of brass, copper, zinc, galvanized steel, or cast iron as the ammonia will degrade those materials. In either an ammonia or Freon system, pipes are rated for temperature and are often insulated throughout the refrigeration process.
Following the compressor, the next stage in a refrigeration system is the condenser and receiver. As stated previously, the compressor takes the refrigerant in a cool, low-pressure state and compresses it into a vapor at much higher temperatures. From the compressor, the refrigerant vapor is piped to a condenser, which is basically a series of tubes and fins often accompanied by fans to drive air through them. The job of the condenser is to remove heat from the refrigerant as it liquefies.
There are four types of condensers that can be used in a cold storage facility including air cooled, liquid cooled, evaporate, and static. If the refrigeration system has an expansion value, it will often have a receiver following the condenser. The receiver’s functions are to 1) separate any refrigerant vapors from its liquid form; 2) receive and pipe the liquid refrigerant towards the expansion valve, and 3) store any liquid refrigerant during a shut down.
The expansion valve, or thermostatic expansion valve (TXVs) to be precise, functions as a gatekeeper for the next stage of the refrigeration system, the evaporator. As the liquid refrigerant is piped towards the evaporator, an expansion valve allows refrigerant to expand, lowering its temperature and allowing it to absorb heat inside the cold room via the evaporator. The expansion valve throttles refrigerant automatically based on the requirements of the evaporator.
The evaporator is the final stage of the refrigeration system and the component used to reduce temperatures in cold storage facilities. Working in the opposite way of the condenser, the evaporator takes the low pressure and temperature liquid refrigerant from the expansion valve and allows it to absorb heat from the air flowing around it. Because the liquid refrigerant is at a much lower temperature than the surrounding air and has a low boiling point, the refrigerant attracts and absorbs an increasing amount of heat through the evaporator as air moves around it. Through this system the refrigerant removes heat from the cold room and, as its name would suggest, returns its evaporated form to the compressor to start the entire refrigeration process over again.
In cold storage facilities, refrigeration systems often work in tandem with several other systems which ensure the desired temperature is met and the physical elements of the facilities are protected from extreme temperatures. In facilities with room temperatures consistently below freezing, underfloor heating is typically required to prevent heaving. Heaving takes place when the soil beneath the facility floor freezes, form ice, and expand pushing the floor, columns, walls, and even the roof upwards.
There are several types of underfloor heating used in below freezing cold storage facilities. An electric heat system uses trace place in metal conduit buried in the sub slab and monitored by a control system. A pumped fluid system typically moves glycol or other warm fluid through a system of pipes. Then there are the forced ventilation and natural ventilation systems, where air is used to heat the sub slab area. With any system, the objective is to raise the temperature thereby avoiding any damage due to ground freeze and heaving.
Within the cold storage facility, the cold room is the main storage area being refrigerated. Cold storage rooms can be built in multiple types of configurations and with many different types of features. Common to all cold storage rooms is their purpose to contain and maintain temperature. To do this, cold storage rooms are typically constructed with materials that are insulated.
Cold room walls, for example, are typically insulated metal panels or IMP; essentially consisting of a metal exterior and an expanded polystyrene (EPS) core. Considerations for cold storage walls include its R-Value, fire rating and ease of installation. In addition to its walls, cold storage rooms have ceilings or roofs that are also insulated, either with IMP or with single-ply TPO or PVC with layers of insulation such as polystyrene. Lastly, door design is important in order to contain and maintain desired temperatures efficiently. For those rooms with low traffic or long term storage of goods, a low speed highly insulated door may be preferred. Rooms with a high traffic or short term storage of goods may prefer higher speed or rapidly opening doors, which can often rise and close in very short periods of time to restrict airflow.
Racking is often a significant consideration in the cold storage facility because a cubic foot of refrigerated space is expensive to build and maintain. Racking can be a costly component of the facility, not just for the initial installation but also because it can be challenging to replace. Re-racking a cold storage facility can trigger all sorts of requirements, from OSHA to replacing an entire sprinkler system. Furthermore, racking ultimately controls one of the most important metrics in cold storage, the pallet count. Since cold chain companies often charge by or track their product using the pallet, the number of pallets a cold storage facility can hold is generally an indication of how much money or product they can spend or hold. Ratios such as pallet per square foot and pallet per cubic foot can indicate how efficient a cold storage facility might be compared to its square foot and cubic size.
Most of the time, cold storage facilities employ selective pallet racking, where the pallets can be easily accessed at all times. Other types of pallet racking include drive-in, push back, gravity flow, and movable types which can be condensed to preserve space. Whatever the type of racking, its ability to store product densely is critical as long as it meets the needs of the operation.
Selecting racking in a cold storage facility is not only about storage capacity, but the materials and construction of the rack should also be considered. Racking typically is built in two forms, roll formed and structural bolt together. Where roll form is the typical standard in ambient temperatures, in cold storage structural bolt-together can be better because it is less susceptible to failure in freezing environments. Another consideration is the chances of a forklift hitting racking in a cold environment is higher than in an ambient environment. Reaction times are slower for forklift drivers in colder environments, which can lead to greater accidental impacts with racking and other areas of the cold storage facility. Smart operators will use heavier duty racking and protective devices, such as bollards, to prevent damage to sensitive areas.
Adjacent to cold storage rooms are sometimes found blast cells or freezers. These are rooms or areas dedicated to freeze products quickly for storage and/or transport. There are generally three types of blast freezers; continuous, variable retention time (VRT), and blast cells. Continuous are usually located in production facilities at the final stage, such as frozen pizza. Tunnel and spiral are two types of continuous freezers. Variable retention time (VRT) freezers are typically hybrid systems including batch blast freezers and continuous freezer systems. VRTs are typically located near production lines. Finally, blast cells are the most common type of blast freezer found in the cold storage facility. Their function is to freeze many pallets of boxed product at one time using a high volume of cold air.
Between the cold storage rooms and the exterior loading areas is the cold dock. Cold docks are an important component of most cold storage facilities because they allow for product to be staged in a temperature controlled environment prior to loading or storage. It is typically not necessary to refrigerate cold dock areas to freezing temperatures, even for frozen product, since they are designed to slow down the thawing process and not for storage.
Another room commonly found in cold storage facilities is the battery charging room. Battery charging rooms are typically separate, well-ventilated areas designed to prevent the build-up of hydrogen gas and keep heat away from the cold storage areas. Hydrogen gas is a by-product of the battery charging process and it is explosive if concentrated. An air mixture of 4% or more hydrogen has a high risk of explosion. In addition to ventilation, battery charging rooms will typically have acid resistant floors and ample electrical distribution. Battery life suffers in colder environments and the typical battery can lose up to 35% of its charging capacity in cold versus ambient environments. Because multiple charges per day reduces battery life, a greater number of charging stations are often required to fully charge batteries before they are used.
Loading areas in the cold storage facility are typically found off a cold dock and have some specialized features when compared to ambient loading areas. Dock doors will typically be insulated and sealed to prevent the loss of cold air. Although mechanical and hydraulic “pit” levelers are not uncommon, in order to prevent additional loss of temperature and prevent pests there are also vertical-storing dock levelers. As with ambient space, dock lights and door controls are common features in cold storage facilities as typically are no skylights to help illuminate the dock areas. Outside the dock doors, dock seals and/or shelters help keep the cold air in and the elements out of the storage areas. They also can protect employees loading and unloading. Reefer electrical plugs and trailer restraints also are common amenities, allowing refrigerated containers to run and be safely loaded and unloaded at the dock. Grade level doors are also common and can be used for the loading and unloading of equipment and other large items.
Yards are an increasingly important part of the cold storage facility. More operators are requiring off-dock trailer storage and increased areas for trailer staging in yard areas. For safety and insurance purposes, they want separate employee parking and truck yard areas. In order to keep yard maintenance costs to a minimum, operators also look for concrete dolly pads or yards as opposed to asphalt.
Rail service is another feature which can add to the functionality of the cold storage facility. Many large and intermediate agricultural companies use rail to bulk ship goods, many times from the growing areas to more populated areas. Rail served cold storage facilities will typically have a rail dock consisting of a refrigerated area and insulated doors leading to the rail spur outside. However, even if a cold storage facility has rail related infrastructure, including the rail spur and rail docks or doors, users should always investigate whether the rail is active upstream from their spur and includes any required switch infrastructure. Lastly, many companies want to investigate the possibility of using rail at their facilities, typically to replace truckload or intermodal shipments. However, railroad lines typically required a certain volume to service specific facilities so such companies should also check with the railroad who owns the spur and upstream lines to make sure they will service their facility.
As with ambient storage facilities, fire protection systems are an important part of the design and safety of cold storage facilities. Unlike ambient storage facilities, wet sprinkler systems are impractical for cold storage facilities. Freezing temperatures can cause wet sprinkler pipes to burst-causing a significant damage as a result. Instead, non-wet sprinkler systems or, for example, double-interlock pre-action sprinkler systems are often utilized. In such systems the fire protection system requires a detection signal from a heat detection cable, which in turn opens a sprinkler valve to allow air to escape the sprinkler pipe. The escaping air pressure then triggers a deluge valve which allows water to enter into the sprinkler pipe. One example of a non-wet system is Tyco’s Quell System.
A common misconception is that fire dangers are somehow mitigated in cold storage facilities due to the low temperatures. On the contrary, cold storage facilities often contain flammable construction materials and present a more difficult environment to extinguish a fire. Notorious fires such as the Worcester Cold Storage Fire are deadly examples of the challenge and tragedy sometimes presented by fires in cold storage environments.
As with fire protection systems, lighting in the storage areas of cold storage facilities play an important role in how the space can be utilized. They also have an impact on the energy costs incurred by the cold storage facility. With the advent of LED technology, users of cold storage facilities have increasingly been replacing fluorescent lights in order to save money on energy costs, replacement bulbs, reducing heat generation, and achieving a lower carbon footprint. The ballast of a fluorescent light can be a major heat source in a cold room, releasing up to 10% of its input power as heat. This heat must be compensated by the evaporator system in the cold room, increasing its energy consumption and the corresponding energy costs. The new LED lighting for cold storage facilities often has motion sensors and are zoned, allowing operators to save more money by keeping the lights off where no activity is present. Light brightness is an important element for all but he fully automated cold storage facility, as any natural light source such as a skylight can be a source of heat and temperature loss.
Evaluating Cold Storage Facilities
Lastly, for the cold storage user and property owner the evaluation of an available cold storage facility typically involves several vendors, contractors, and specialists. As a broker who sells and leases cold storage facilities, part of my service is conducting a general evaluation of the cold storage features before my customer spends resources involving other vendors or specialists. In addition to any questions generic to ambient or cold storage, we will provide a general evaluation of the cold storage facility being offered including the following features, and will assist any further investigations by cold storage vendors. Most owners will have information related to these features readily available upon request.
- Square foot and cubic feet storage capacity
- Pallet count capacity (by storage room)
- Power supply, metering, and distribution
- Prior history of utility bills
- Refrigeration system
- Operating status
- Size (lbs)
- Age and maintenance history of components
- Underfloor heating
- Storage rooms
- Built-for-Cold or Box-in-Box
- Temperature ranges
- Existing racking
- Lighting type
- Blast cells
- Cold docks
- Fire protection systems
- Battery charging room (# of stations)
- Yard and parking
In conclusion, cold storage facilities are a unique product type within supply chain real estate. They are often complex, highly engineered systems designed to remove heat and retain cold at precise temperatures. For the cold storage operator and property owner, it is important they have a team of specialists who understand how to properly evaluate cold storage facilities for the features discussed in this post. If my team and I can assist you with any cold storage related topic, please do not hesitate to reach out to us. Thank you.