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PRW Industry on Expansion Track Despite Regional Economic Woes.

Inventories and turnover increase worldwide. Computerization of industry management functions nearly complete, and Internet usage grows. CFC ban impacts now fully absorbed.

Inventories and turnover increased for public refrigerated warehouses in all reporting world regions, according to the 1999 Annual Cold Storage Survey by Quick Frozen Foods International, in cooperation with the International Association of Refrigerated Warehouses (IARW).

The increase was strongest in the Americas and the US. All Americas (Canada, Caribbean and Latin America) respondents (100%) report inventory and turnover increases this year, up from 29% inventory and 45% turnover rises last year. In the US, inventory `ups' nearly doubled -- from 32% in 1997 to 59% in 1998. Most of this increase was in the East Central and Eastern regions (73% and 67% respectively). US turnover increased sharply (from 35% in 1997 to 57% in 1998), as did worldwide turnover (from 48% to 87%).

The survey response increased from 188 facilities reporting in 1998 to 248 facilities in 1999. Major operators in Japan and China were among those replying. Responses are weighted by number of facilities reported. Percentages for Asia/Pacific Rim may be overstated due to a weighting effect by the numerical preponderance of Asia/Pacific operators running large numbers of facilities. There is some variation in data from under-representation in survey responses from Europe and failures to check all relevant data boxes by some respondents.

The IARW estimates that in 1993 and 1994, its membership represented 80o/6 of the world's warehouses other than those in the USA, where 85% of warehouses had IARW connections. These figures were adjusted to 90% and 95% respectively from 1995 onwards with the rejoining of IARW by the major warehouser AmeriCold Logistics.

Out of 17 reporting facilities in the Americas, 14 (82%) have indicated

expansion or renovation plans, adding 3% to overall warehouse capacity -- mainly in the 0 [degrees] C category. This is remarkably optimistic in view of Brazilian economic problems weighing down Latin America recently. New construction worldwide is concentrating in the -29 [degrees] C deep-freeze category (22%), which is double the combined total (11%) of new construction for -18 [degrees] C and 0 [degrees] C warehouses and office space. Net freezer space gains of 13% in the US and 4% worldwide were reported by survey respondents.

In computerization categories this year, over 90% of respondents noted use of computers for accounting and other management functions. Therefore, as full utilization nears, QFFI has dropped these categories from the survey. Other add-on software categories are still growing in usage, so their tabulation is retained.

Most business software systems build on a basic accounting module with add-ons for payroll, inventory, special reports and analysis/modeling. It is assumed that most frozen food warehouses now have basic accounting modules and are gradually phasing in other operations modules.

Internet usage has grown considerably this year. QFFI's figures are not comparable with previous years because of increased new responses from the Asia/Pacific Rim region. Additionally, 45% of US respondents and 26% of worldwide respondents plan to go on-line with web sites this year.

Only four respondents (none in the US) indicated usage of radio frequency scanners in this survey -- too few for any statistical analysis. This is obviously under-reported, since RF scanner technology is attracting increasing interest and usage among cold storage warehouse operators (See sidebar on this page).

CFC usage questions were eliminated this year because the Montreal Protocol (signed in 1987) impact is now almost fully absorbed by the industry. Canada's National Office of Pollution Prevention notes that on Jan. 1, 1996 all developed countries reported the elimination of the most damaging ozone-depleting substances (mainly CFCs).

Ammonia compressors remain the worldwide favorite (77%) in refrigeration equipment purchasing plans this year, but the increased response from China indicates a strong presence of screw compressors (93%) there not reported in 1997. In the US, plans to buy ammonia compressors outweigh screws by 33% to 25%.

Standard racks and pallets figure prominently in worldwide respondents' materials handling purchase plans while automatic racks, conveyor belts and systems are preferred in Europe and the Mid-East. One Latin American operator listed single-faced racking as a choice. The Eastern US region strongly favored gravity racks (39%). However, check-off responses were limited in this category, so percentages may be overstated accordingly.

For lift trucks and batteries, US purchasing interest remains high, particularly in the Eastern and Pacific regions. European and worldwide interest is even higher, with averages of 96% and 89% reporting lift truck and/or battery purchasing plans. European interest in rechargers (8%) appears low, but totals are 55% worldwide. In the doors category, automatics are the US favorite, especially in the Pacific region. In the rest of the world, plastic strip curtains are a preferred purchase, in part due to their lower cost.

There has been a dramatic surge in the popularity of Polyurethane panels and sheets (45% and 36% in 1999, 11% and 6% in 1998), which are now heavily preferred as insulation methods throughout the world, overtaking Styrene sheets (44%) which came in a distant second. Eight facilities reported utilizing refrigerator pipe insulation and vessels for insulation.

There was no Latin American response on computer purchasing plans, but 39% of respondents in the United States and 84% in the Europe/Middle East region indicated upgrade plans. Far fewer (10% US, 4% Worldwide) indicated computer system replacement plans. And about one out of four operators are planning to add terminals, purchase software or hardware. The average operator has had computers in service for 4.3 years. The stronger favorable response on upgrading reflects the fact that upgrades are cheaper than replacements, and are available several times a year for many computer products.

In specialized services, US warehouses leveled off at 76% offering freezing services after a three-year decline. Repacking and rental of processing and office space have dropped sharply in 1999 from '98 levels. J. William Hudson, president of IARW, suggests a reason for the decline in specialized services. "Warehouse operators in the United States are now focusing a lot more on their core business, which is increasingly distribution services," he told Quick Frozen Foods International.

Outside the United States, specialized services remained at a relatively high level, no doubt reflecting a need to maximize income from warehouse premises. In transport refrigeration, only one percent of respondents (situated in the Middle East and Asia) reported using other than mechanical refrigeration systems on their trucks. An alternate method cited was a "mechanical/ice combo."

Commenting on the dynamic changes that are reshaping the public refrigerated warehousing industry globally, Hudson noted: "Most of today's services did not exist a generation ago. Many did not exist earlier in this decade. Tomorrow will bring others as technology and imagination allows. We are living in a profound period of change. The next century will be as exciting and challenging as this past formative century has been.

[Figures ILLUSTRATION OMITTED]

WAREHOUSE CONSTRUCTION PLANS, 1999

By Percentage of Regional Facilities
 Asia/ USA
Activity Pacific West
 Rim Americas Total Central

New Construction
 Warehouse -29[degrees]C 7% 27%
 Warehouse -18[degrees]C 6% 12% 9% 27%
 Warehouse - O[degrees]C 1%
 Office 6% 6%

Additions
 Warehouse -29[degrees]C 9% 9% 33%
 Warehouse -18[degrees]C 1% 7%
 Warehouse - 0[degrees]C 82% 1% 7%
 Office 59% 6% 27%

Renovations
 Warehouse -29[degrees]C
 Warehouse -18[degrees]C 23% 27%
 Warehouse - 0[degrees]C 12%
 Office 12%
 Other 6% 12%

Net Freezer Space Gain (%) 3% 13%

 By Percentage of Regional Facilities

 Activity East East Europe & World
 Central Mid East

New Construction
 Warehouse -29[degrees]C 4% 6% 80% 22%
 Warehouse -18[degrees]C 33% 7%
 Warehouse - O[degrees]C 6% 1%
 Office 22% 3%

Additions
 Warehouse -29[degrees]C 4% 8% 4%
 Warehouse -18[degrees]C
 Warehouse - 0[degrees]C 21%
 Office 16%

Renovations
 Warehouse -29[degrees]C
 Warehouse -18[degrees]C 44% 6%
 Warehouse - 0[degrees]C 30% 3%
 Office 30% 80% 23%
 Other 4%

Net Freezer Space Gain (%) 4%


MATERIALS HANDLING PURCHASING PLANS, 1999

By Percentage of Regional Facilities
 USA USA USA
 Asia/ Pacific West
Item Pacific Rim Americas Total Central

Racks
 Standard 99% 82% 64% 89% 40%
 Gravity 93% 12% 7%
 Automatic 93%
 Other 24%

Conveyor Systems 93% 1% 7%
Conveyor Belts 93%
Cranes 93%
Pallets 94% 59% 51% 89% 20%
Slip Sheets 93% 30% 89% 13%
Metal Dock Boards 93% 24% 30% 13%

Lift Trucks 93% 94% 70% 89% 47%
Lift Truck Batteries 93% 100% 72% 89% 40%
Battery Rechargers 93% 71% 48% 89% 47%

Doors
 Automatic 99% 6% 36% 89% 27%
 Mechanical 1% 12% 13%
 Manual 93% 71% 13% 13%
 Air Curtains 93% 12%
 Plastic Strip Cu 94% 59% 19% 7%
 Dock Locks 99% 82% 16% 89% 7%

 By Percentage of Regional Facilities

 USA USA
 East East Europe & World
Item Central Mid East

Racks
 Standard 70% 61% 88% 83%
 Gravity 39% 26%
 Automatic 88% 45%
 Other 6%

Conveyor Systems 88% 46%
Conveyor Belts 80% 43%
Cranes 23%
Pallets 56% 50% 16% 55%
Slip Sheets 37% 6% 31%
Metal Dock Board 41% 44% 8% 39%

Lift Trucks 67% 83% 96% 88%
Lift Truck Batteries 96% 56% 96% 90%
Battery Rechargers 30% 56% 8% 55%

Doors
 Automatic 41% 11% 88% 57%
 Mechanical 4% 44% 6%
 Manual 15% 17% 44%
 Air Curtains 88% 48%
 Plastic Strip 7% 56% 96% 67%
 Dock Locks 41% 80% 69%


Source: Quick Frozen Foods International

REFRIGERATION EQUIPMENT PLANS, 1999
 By Percentage of Regional Facilities

 Asia/ USA USA USA
 Pacific Pacific West
Item Rim Americas Total Central

Compressors
 Ammonia 100% 94% 33% 89% 40%
 Fluorocarbon 93% 59% 3%
 Screw 93% 94% 25% 27%
 Reciprocatin 100% 59% 9% 27%
 Packaged
 Central 93% 59% 9% 33%

Condensers 7% 94% 89% 40%

Coils 99% 82% 89% 33%

Fans/Blowers 100% 82% 43% 89% 27%

Refrigerant 93% 59% 13%

 By Percentage of Regional Facilities

 USA USA
 East East Europe World
Item Central Mid East

Compressors
 Ammonia 56% 11% 80% 77%
 Fluorocarbon 11% 8% 41%
 Screw 41% 11% 88% 75%
 Reciprocatin 11% 42%
 Packaged
 Central 80% 60%

Condensers 11% 17% 88% 47%

Coils 52% 17% 80% 65%

Fans/Blowers 52% 22% 8% 58%

Refrigerant 50% 41%


Source: Quick Frozen Foods International

INSULATION PLANS, 1999
 Percentage of Regional Facilities
 USA
Item Asia/Pacific Rim Americas Total

Polyurethane Panels 59% 32%
Polyurethane Sheets 59% 6%
Polyurethane Foam 93% 1%

Styrene Panels 7% 24%
Styrene Sheets 93% 4%
Styrene Foam

Glass Fiber Sheet 93% 6%
Glass Fiber Foam 6% 6%

 Percentage of Regional Facilities

 World
Item Europe & Mid East

Polyurethane Panels 88% 45%
Polyurethane Sheets 80% 36%
Polyurethane Foam 24%

Styrene Panels 80% 28%
Styrene Sheets 80% 44%
Styrene Foam

Glass Fiber Sheet 25%
Glass Fiber Foam 3%


SERVICES/QUALITY CONTROL, 1999
 By Percentage of Regional Facilities

 USA
 Asia/Pacific
 Rim Americas Total

Freezing 99% 100% 75%
Repacking 99% 71% 30%
Rent Processing Space 93% 59% 32%
Rent Offices (customers) 93% 71% 29%
Rent Offices (other) 93% 26%
Direct Sales 59% 1%
ECR/TQM Programs 59% 6%
Cross-Docking 100% 100% 88%
ISO 99% 59% 12%
HACCP 93% 100% 62%
Other 65% 16%

 By Percentage of Regional Facilities

 USA USA USA
 Pacific West East
 Central Central

Freezing 89% 93% 85%
Repacking 13% 22%
Rent Processing Space 53% 52%
Rent Offices (customers) 11% 60% 7%
Rent Offices (other) 7% 37%
Direct Sales 27% 4%
ECR/TQM Programs
Cross-Docking 100% 47% 100%
ISO 4%
HACCP 11% 40% 89%
Other 33%

 By Percentage of Regional Facilities

 USA
 East Europe
 & Mid East World

Freezing 39% 92% 92%
Repacking 72% 84% 71%
Rent Processing Space 88% 68%
Rent Offices (customers) 44% 80% 68%
Rent Offices (other) 39% 80% 50%
Direct Sales 15%
ECR/TQM Programs 16% 20%
Cross-Docking 100% 20% 77%
ISO 39% 92% 65%
HACCP 67% 84% 85%
Other 11% 20%


Source: Quick Frozen Foods International

Source: Quick Frozen Foods International

COMPUTER FACILITIES, 1999
 By Percentage of Regional Facilities

 USA USA
 Asia/Pacific Pacific
 Rim Americas Total

Status:
 Own Mainframe 93% 82% 61% 89%
 Shared Mainframe 18% 6%
 Mini Computer 93% 16%
 Desktops 93% 45% 89%
 Networked Desktop 99% 71% 89%
 Bar Coding Technology 99% 35% 23%

Plans:
 Upgrade System 93% 39% 100%
 Replace System 6% 10%
 Add Terminals 93% 32%
 Get Hardware 19%
 Get Software 99% 19%

Utilization:
 Mgt. Info. System 93% 35% 52% 89%
 Traffic Routing 93% 24% 23%
 Energy Management 99% 12% 48%
 Payroll 100% 12% 75% 100%
 Analysis Modeling 6% 24% 59% 89%
 Logistics Package 93% 12% 33%

 By Percentage of Regional Facilities

 USA USA USA
 West East East
 Central Central
Status:
 Own Mainframe 67% 63% 39%
 Shared Mainframe 27%
 Mini Computer 60% 4% 6%
 Desktops 33% 56% 17%
 Networked Desktop 67% 81% 53%
 Bar Coding Technology 7% 30% 41%

Plans:
 Upgrade System 27% 26% 41%
 Replace System 7% 35%
 Add Terminals 33% 44% 29%
 Get Hardware 40% 15% 18%
 Get Software 33% 15% 24%

Utilization:
 Mgt. Info. System 53% 63% 18%
 Traffic Routing 60% 41%
 Energy Management 33% 52% 82%
 Payroll 100% 100% 53%
 Analysis Modeling 87% 41% 53%
 Logistics Package 60% 19% 53%

 By Percentage of Regional Facilities

 Europe
 & Mid East World

Status: 100% 84%
 Own Mainframe 80% 26%
 Shared Mainframe 8% 29%
 Mini Computer 34%
 Desktops 8% 44%
 Networked Desktop 96% 63%
 Bar Coding Technology

Plans: 84% 54%
 Upgrade System 4%
 Replace System 31%
 Add Terminals 8% 7%
 Get Hardware 29%
 Get Software

Utilization: 16% 49%
 Mgt. Info. System 88% 57%
 Traffic Routing 92% 63%
 Energy Management 100% 72%
 Payroll 88% 44%
 Analysis Modeling 84% 55%
 Logistics Package


Source: Quick Frozen Foods International

TRANSPORTATION PLANS, 1999
 By Percentage of Trucks Reported in Service

 Asia/Pacific USA
 Rim Americas Total

Straight Trucks 84% 17% 8%
 Refrigerated Trucks 16% 31% 27%
 Refrigerated
 Trailers/Containers 31% 47%
 Trailers/Containers 21% 17%
Tractor Units 2%

 By Percentage of Trucks Reported in Service

 World
 Europe & Mid East

Straight Trucks 27%
 Refrigerated Trucks 100% 44%
 Refrigerated
 Trailers/Containers 20%
 Trailers/Containers 9%
Tractor Units


Source: Quick Frozen Foods International

COMMUNICATIONS, 1999
 Percentage of Regional Facilities

 Asia/Pacific USA
 Rim Americas Total

Computer/Modern 100% 65% 83%
Telex
Fax 100% 76% 93%
Direct Suppliers 93% 17%
Direct Customers 93% 29% 33%

 Percentage of Regional Facilities

 World
 Europe & Mid East

Computer/Modern 92% 85%
Telex 100% 25%
Fax 67%
Direct Suppliers 100%
Direct Customers 100%


Source: Quick Frozen Foods International

About This Survey

This article is based on responses to Quick Frozen Foods International's Annual Global Refrigerated Services Survey of members of the International Association of Refrigerated Warehouses and other coldstore operators around the world. The editors wish to thank IARW President J. William Hudson and his staff for their cooperation in conducting this poll.

RELATED ARTICLE: More Cold Stores Applying Radio Scanning Technology

Ian Miller, chairman of the IARW Technology Committee, reports that use of radio frequency (RF) scanners is becoming more the norm for PRW operators and frozen food companies.

"Companies using scanners are seeing improvements in efficiency. Error rates are down," he told QFFI. "The technology has been there for over five years, but attempts to apply it to cold storage conditions up until last year were failures.

First-generation RF scanners had mechanical difficulties," he explained. "The gear-driven lasers froze at sub-zero operating temperatures. Now, in the second-generation scanners, a magnetic field oscillates the mirrors that aim the lasers. This cured the low-temperature glitch because magnetic fields are not temperature-sensitive. However, some installation problems still needed to be worked through, and have now been solved."
COPYRIGHT 1999 E.W. Williams Publications, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1999 Gale, Cengage Learning. All rights reserved.

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Publication:Quick Frozen Foods International
Geographic Code:1USA
Date:Apr 1, 1999
Words:2555
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