Utilizing public refrigerated warehouses (PRWs) can help a meat company to focus its time and energy on what it does best: process meat.
Michael Shaw, vice president/secretary of the Bethesda, Md.-based International Association of Refrigerated Warehouses, points out the advantages of using PRWs.
"First is the return on investment," he adds. "The Tax Reform Act of 1986 makes it even less desirable for American meat businesses to build and operate private warehouses. Second, you have a worldwide network of refrigerated warehouses which allows a company to market anywhere it wants-immediately.
"Third, each warehouse offers a complete menu of services from which to choose. Packers and processors can choose only those services they need. They don't pay for services they don't use."
Shaw says the PRW industry took off in the 1980s. Since then, PRWs have begun to offer many services, such as freight consolidation, import/export handling, cross-dock operations, just-in-time delivery, inventory control/communication, processing/freezing-and special services like leasing, brokerage and documentation.
Evolving technology is fueling further growth of the PRW industry.
"Let's take bar coding and radio frequency scanning where you can scan directly into your computer-and your customer has access to this data," Shaw says. "One of our big goals now is to focus on this area. We want to help the customer make the best possible use of any technology he has.
"What we can do is limited only by what the customer can do," he adds. "If customers want to upscale their technology, we'll upscale ours to help them make the best use of it."
Two types of PRWs exist: distribution warehouses and production warehouses. A production warehouse is typically located in an agricultural area where packers can send meat directly from the plant. These warehouses can either store refrigerated product or offer services, such as blast freezing, and hold it until the packer or processor needs it.
Shaw says to expect more contractual agreements between customers and PRWs, which include dedicated warehousing (a warehouse that holds only one customer's products at the customer's specifications). And we may see more processing performed on-site at PRWs.
Shaw is bullish about the future of PRWs.
"There's no evidence that our industry [PRW] will do anything but grow," Shaw concludes.
IARW members represent almost 1,000 PRWs (or cold stores) in 33 countries, totaling about 1.7-billion cubic feet of refrigerated space. IARW represents about 500 warehouses in the United States, Canada and Mexico. There are 465 located in the United States.
IARW members are now beginning to do more business in Mexico, because of the North American Free Trade Agreement.
"A number of our members are setting up major alliances with either cold stores or with producers or processors," Shaw says.