Wilmington, N.C. – The temperatures inside Port of Wilmington Cold Storage (PWCS) may be below freezing, but the demand for cold storage in North Carolina is red hot. PWCS is a new, 101,000 square foot refrigerated warehouse used to maintain specific temperatures for the storage of perishable goods, such as fruits, vegetables and proteins. The warehouse is located within the gates at the Port of Wilmington and is not only the first in-port cold storage facility in North Carolina, but one of a select few such facilities in the entire nation.
Cold storage facilities allow companies to distribute their perishable goods locally, nationally, and globally. According to industry analysts, 88 percent of the demand for refrigerated storage is from the food industry, with the remaining 12 percent consumed mainly by pharmaceutical, floral and fur producers that require temperature-controlled storage. Pharmaceutical companies, in particular, are expected to increase their demand for cold storage as they increase production of temperature controlled vaccines and biologic drugs for conditions such as rheumatoid arthritis and Type 2 diabetes.
The Port of Wilmington is a major hub for exporting refrigerated and frozen pork and poultry products and other perishable goods, but prior to PWCS, it did not have a cold storage facility, causing North Carolina to lose valuable business. Exporters of perishable goods were forced to look outside of NC for ports with a cold storage facility within or near it gates, such as those found in neighboring states to the north and south. With its August 15, 2016 opening, PWCS is expected to provide area food processors with a more affordable way to grow their export business.
“Agriculture is an $84 billion industry for North Carolina and the #1 industry in the state,” said Chuck McCarthy, President and CEO of PWCS. “And the demand for US meats and vegetables abroad is very high, particularly in Asia. We anticipate that PWCS is going to allow NC producers and processors to significantly grow their export business by providing them with a more cost-effective alternative to trucking their products to out-of-state ports. And we also hope that local growers who may have thought export was out of their reach will consider working with us to help them grow their market overseas.”
Hanjin Shipping of South Korea had historically provided shipping services from Wilmington to Asia, but the line declared bankruptcy in August of this year. Fortunately, Maersk Line, already a major player at the Port of Wilmington, quickly stepped in and announced the addition of a Westbound service, offering direct shipping from Wilmington to Asia, effective October 8, 2016.
“With PWCS, we can now compete with neighboring states to attract more agricultural exports to the Port of Wilmington,” said Robert Hosford Assistant Director, Foreign Direct Investment, NC Department of Agriculture. “The demand for chicken overseas is particularly high and we anticipate that PWCS will allow NC poultry farmers to significantly grow their export business to Asia. The demand for frozen sweet potato fries is also expanding in Europe, so we anticipate PWCS will likely see an influx of European bound sweet potatoes as well. The addition of a cold storage facility this close to the water is a huge advantage for NC agriculture and the food processing industry.”
PWCS is a joint venture of USA InvestCo, a Wilmington-based real estate development and investment firm, and the NC State Ports Authority. The warehouse facility is wholly owned by USA InvestCo, but the property on which it is located is owned by the Ports and leased to USA InvestCo. Total cost for the project was $17.5 million, which includes pre-development, construction and opening operating expenses.
“Customers and carriers seeking cost-effective and efficient solutions continue to find even greater resources available at North Carolina Ports”, said Paul J. Cozza, North Carolina Ports Executive Director. “The Port of Wilmington Cold Storage facility is a major part of our modernization plan, offering convenience, logistical support, expedited delivery times, and substantial savings for protein providers on transportation costs.”
Cost Saving Benefits
“The #1 advantage of being located within the port is that we are able to pack containers with more product at less cost,” said McCarthy. “A shipping container loaded at the port can hold 60,000+ pounds of product, versus a container loaded inland, which can only hold a maximum weight of about 57,000 pounds. Trucks are regulated on the weight they can carry over roadways, but our shipping containers never leave the port, so they can carry a heavier load. We can pack 5% or more product in a shipping container, which translates into considerable savings for our customers. These savings give us a competitive edge over cold storage facilities located outside of port property, like those in neighboring states.”
Another advantage that PWCS offers NC producers is lower transportation costs. For instance, one of the world’s largest pork processing plants is located in Tar Heel, NC, which is 65 miles from the Port of Wilmington but considerably further from the ports to the north and south.
PWCS Features and Services
PWCS is a state-of-the-art refrigerated warehouse, with nearly three million cubic feet of freezer and cooler space and 10,600 pallet positions. The warehouse is divided into three primary areas: a convertible room that can be used for refrigerated or frozen products, depending on customer needs; a freezer room where temps are maintained below zero degrees; and a blast freezing room where products like chicken and pork can be frozen to zero degrees within 24 hours. USDA regulations require that meats be frozen to zero degrees within 72 hours of slaughter. USDA inspection is provided on-site, with a dedicated office for USDA personnel.
PWCS has a loading dock with 11 truck bays to allow for quick transfer of product into and out of the warehouse. Ceiling heights range from 35’ to 40’ high and allow for maximum efficiencies and space utilization.
PWCS offers both cooling and freezing services, with temperatures ranging from -10 to 40 degrees Fahrenheit. On-site blast freezing is available, with a capacity of up to 200 pallets per day. In addition to cold storage, PWCS services include:
- USDA approved export stamping, labeling and export document preparation
- Container loading, unloading and cross-docking
- Domestic freight loading and unloading
- Computerized inventory control
- Handling, slip sheeting and case selection
- Shrink wrapping
PWCS currently has 12 employees – three office personnel and nine warehouse staff. When fully operational and operating two shifts, PWCS is expected to employ a staff of 60 to 80 people. Those employment figures could increase, as PWCS was constructed and permitted to expand by an additional 250,000 square feet as demand warrants.
Investing in North Carolina
According to industry analysts, the cold storage facility industry is forecasted to grow by about 3.4 percent annually through 2019, and will likely continue as population growth continues to increase demand for refrigerated storage.
“Populations are increasing both domestically and internationally, as is the demand for food,” said Chuck Schoninger, President and CEO of USA InvestCo. “Regardless of the fluctuations in the economy, the demand for food is constant, which makes the cold storage industry somewhat recession proof. We are actively exploring additional locations for cold storage facilities and would ultimately like to have several strategic locations along the East Coast.”
USA InvestCo funded the cold storage facility in part through the use of the federal government’s EB-5 Visa program. The EB-5 program attracts foreign investment by offering green cards to individuals or families who invest $500,000 in a new or existing business that creates full-time employment for at least 10 US workers per investor. For PWCS, USA InvestCo attracted 30 such investors, each of whom invested $500,000.
“The EB-5 program has allowed us to attract considerable foreign investment into the Wilmington community at a time when banks aren’t lending funds on speculative projects,” said Schoninger.
Headquartered in Wilmington, USA InvestCo is a real estate company that focuses on providing investors with diverse investment opportunities in real estate, existing business acquisitions, and distressed debt markets. In addition to PWCS, USA InvestCo is developing the Northern Riverfront development, a mixed-use, master-planned project on Wilmington’s downtown waterfront. The project is one of the largest new developments underway in the Greater Wilmington area and promises to have a significant impact on economic development, tourism and job creation.