Business & Investment

Cold Chain 3PLRLS Logistics sees significant expansion in 2022

One of the most active consolidators of cold chain facilities is a relatively new venture with old roots.

Established in 1968 RLS Logistics It started with family-owned mushroom cultivation. It added refrigeration facilities and then over time it began to include multiple facilities. Through the joint venture, RLS Partners was formed a year and a half ago with veterans from outside industries. Since then, the Group has been actively developing family-owned cold chain warehouses and logistics providers.

The need for temperature-controlled storage space and associated logistics networks is high. The competition for these assets is also Lineage Logistics And American (NYSE: COLD) Make the most of recent M & A headlines. In fact, Lineage, the world’s largest temperature-controlled warehouse and logistics provider, Raised over $ 4 billion in the last two years, This has been used primarily to fund acquisitions.

New Jersey-based third-party logistics provider RLS takes a different approach to M & A. It aims to work only with family-owned companies whose current leadership will continue to operate the facility after the transaction is closed. RLS finds value in maintaining control from acquired PROs or partnering with local operators. They are experts in their respective markets, have close relationships with local customers and vendors, and have the expertise to operate the facility.

“We aim to acquire another family-owned cold storage provider that is well-managed and has a good vision and a good strategy for customer experience,” said John Gorde, Vice President of Business Development. Told Freight Waves. “It’s important to maintain a family-owned atmosphere, as long as it doesn’t compromise responsiveness and entrepreneurship,” Gordett said.

It’s not just about accumulating a portfolio of real estate assets. Ownership changes usually accompany service changes and often lead to customer attrition.

Tom Casey, Chief Investment Officer of RLS Partners, said: He said this approach is not only a way for families to “steal some money from the table”, but also a way to provide opportunities for the next generation.

Once onboarded, PRO has access to deeper capital resources for expansion and automation upgrades. RLS works with a large New York-based real estate fund to fund acquisition and development projects.

The RLS marketing and sales team will help you rebrand the acquired entity and deploy it to seek national accounts. RLS has established a unique position in the industry as it will soon provide a nationwide network of storage facilities where all operators are fully integrated into the same warehouse management system. This is an important selling point when calling big brands that need a comprehensive inventory visualization platform.

Operators also benefit from enhanced financial and human resources capabilities, as well as advanced quality assurance and safety programs.

PRO will reinvest in the network upon closure. “It’s like a steroid share group,” Casey said. Reinvestment not only leads to the success of individual businesses, but also includes investment in the domestic RLS network.

Casey added that this strategy “matches all our interests.” It creates this partnership nationwide. ”

RLS Logistics also provides controlled transportation services, with sub-truck and truck-load intermediary units that book transportation of goods in and out of the facility. However, some of the acquired entities are running company-owned equipment.

“We are really building a network of people first and foremost,” Casey said. “In fact, you may have partnered with a specific operator in your area who is the best-in-class man who knows all your customers, runs another business, and capitalizes that person and his team. . ”

RLS has already added partners to California, Massachusetts, Pennsylvania and Texas, in addition to its 3PL locations in New Jersey, Pennsylvania, Tennessee and Utah.

The goal is to build a North American network of warehouse operators in approximately 12 “megaregions” throughout the United States and Canada, including locations that serve ports. The identified area is expected to be the largest population center by 2050. This strategy is actually aimed at direct consumer fulfillment.

“The future is: We will reach the population sooner,” Gordet said. In addition to the acquisition, RLS is considering new builds in these regions. “We are identifying the area [that] There is a shortage of up-to-date refrigeration space. “

RLS will have six new partners in the network by the end of 2021, but by the end of 2022 the number could grow to more than 20 including new developments. Currently, the company has approximately 55 million cubic feet of space. It is one of the top 10 providers in North America.

RLS serves food producers, distributors and processors, and offers a variety of cold chain warehousing and transportation services. The warehouse offerings include e-commerce fulfillment, kitting and assembly, packaging and repackaging. The company also offers pool integration and delivery to Wal-Mart (NYSE: WMT) Distribution center.

Last year was a tough year for RLS. In addition to COVID and other headwinds facing the industry, the company has lost Tony Leo, CEO of RLS Logistics, Warehousing Group. Leo was a key figure in RLS’s national expansion strategy.

“Tony’s death shocked our organization,” Gordett said. “Tony’s vision was to develop a strong family-owned national network that would provide an alternative to large competitors. The way the team is working hard to realize Tony’s vision is exciting. ”

Looking to 2022, the pipeline for further industry integration remains strong.

“There are many runways here due to the aging facilities of the industry across the country,” Casey said. “The combination of this national integrated facility program and quality family business has a lot to do over the years to come. There are many great opportunities in the coming years.”

Click here for more Freight Waves articles by Todd Maiden.

clock: 2021 peak season performance (so far)

Cold Chain 3PLRLS Logistics sees significant expansion in 2022 Cold Chain 3PLRLS Logistics sees significant expansion in 2022

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