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April 3, 2021 8:00 AM, EDT

Lineage Logistics Acquires Cryo-Trans for $500 Million

Lineage Logistics is taking steps to be a one-stop shop for refrigerated storage. (Lineage Logistics)Lineage Logistics is taking steps to become a one-stop shop for refrigerated storage. (Lineage Logistics)

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Cold-storage specialist Lineage Logistics is branching into rail.

The warehouse owner acquired Cryo-Trans, an owner of refrigerated and insulated railcars, to capture an additional leg of the food and beverage supply chain. The transaction values Reisterstown, Md.-based Cryo-Trans at more than $500 million.

“A move into rail is part of our effort to be a one-stop shop for our customers and eliminate waste within the food supply chain,” Lineage CEO Greg Lehmkuhl said.

By replacing some trucking capacity with rail, customers may reduce transport costs by 15% to 40%, depending on the shipment size and distance traveled, he estimated.

Already, about 90% of Cryo-Trans customers are part of Lineage’s network. Lineage will seek to partner with its existing customers so that, for example, railcars transporting frozen french fries from the Pacific Northwest to Southeastern states are packed with poultry for the return trip.

Lineage, a real estate investment trust, operates about 340 cold- storage warehouses, spanning more than 2 billion cubic feet (57 million cubic meters) of storage capa­city across 15 countries. It provides ­other services including last-mile delivery, freight consolidation and port logistics.

As part of Lineage, Cryo-Trans will keep executing on its mission of “protecting today’s perishables for tomorrow,” CEO Herman Haksteen said in a statement.

Cryo-Trans owns more than 2,200 railcars, which it describes as the largest private fleet in North America, and its real-time technology facilitates tracking of more than 40,000 annual rail shipments.

In September, Lineage raised $1.6 billion from investors including Oxford Properties Group, BentallGreenOak and Dan Sundheim’s D1 Capital Partners in a transaction that values it at $15.5 billion, including debt.

Lineage, based in Novi, Mich., ranks No. 31 on the Transport Topics Top 50 list of the largest third-party logistics providers in North America.

Lineage’s rail bet is divergent from the tack taken so far by Americold Realty Trust, its publicly traded rival.

“We do not set out to go buy transportation companies,” Americold CEO Fred Boehler said on a November earnings call, acknowledging though that the provision of transportation services “creates stickiness” for warehouse customers.

Atlanta-based Americold Logistics ranks No. 25 on the TT Top 50 list of logistics companies.

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