Lineage says cold storage market working through oversupply
Cold storage market oversupply is stabilizing as food inventories return to normal levels, with new capacity growth slowing to under 2% annually through 2026. Lineage reported 17% decline in container volumes and 3% drop in pallet throughput, but pricing pressure exists in only 15% of US markets.
Stabilizing cold storage means more predictable fulfillment costs for frozen/refrigerated products, but sellers should lock in rates now before the market fully recovers. Monitor your cold chain logistics partners for capacity constraints as the oversupply works through the system.
This signals broader supply chain normalization post-pandemic, with logistics costs stabilizing after years of volatility that compressed seller margins across temperature-sensitive categories.
Review cold storage and refrigerated shipping contracts -- negotiate longer terms while pricing pressure remains in select markets.
Audit frozen/refrigerated product margins in the next 30 days as logistics costs may increase when oversupply fully corrects.
Bottom Line
Cold storage oversupply ending means higher fulfillment costs ahead for frozen sellers.
Source Lens
Industry Context
Useful background context, but lower-priority than direct platform, community, or operator intelligence.
Impact Level
medium
Cold storage oversupply ending means higher fulfillment costs ahead for frozen sellers.
Key Stat / Trigger
17% decline in container volumes
Focus on the operational implication, not just the headline.
Full Coverage
Lineage executives said Wednesday that the temperature-controlled warehouse market is stabilizing after experiencing an oversupply prompted by the pandemic. The Novi, Michigan-based company said its customers’ food inventories have returned to more normal, albeit leaner, levels.
Lineage (NASDAQ: LINE) reported a net loss of $51 million for the first quarter on Wednesday before the market opened. Adjusted funds from operations (AFFO), which exclude depreciation, acquisition and restructuring costs (among other items), of 78 cents per share, came in 8 cents lower year over year. Consolidated net revenue of $1.
3 billion was up less than 1% y/y and just shy of the consensus estimate of $1. 32 billion. A 17% y/y decline in container volumes negatively impacted drayage revenue during the quarter. “In the first quarter, we delivered results ahead of our expectations while navigating a highly dynamic operating environment,” said Lineage President and CEO Greg Lehmkuhl.
“We again saw core business trends align closely with typical seasonal patterns, further reinforcing our view that the industry is stabilizing.” window. googletag = window. googletag || {cmd: []}; googletag. cmd. push(function() {googletag.
defineSlot('/21776187881/FW-Responsive-Main_Content-Slot1', [[300, 100], [320, 50], [728, 90], [468, 60]], 'div-gpt-ad-1709668545404-0'). defineSizeMapping(gptSizeMaps. banner1). addService(googletag. pubads()); googletag. pubads(). enableSingleRequest(); googletag. pubads(). collapseEmptyDivs(); googletag. enableServices(); }); googletag. cmd.
push(function() {googletag. display('div-gpt-ad-1709668545404-0'); }); Table: Lineage’s key performance indicators On a same-warehouse comparison, physical occupancy was 76. 4% in the quarter, 30 basis points lower y/y and 290 bps lower sequentially. Occupancy normally declines 300 bps from the fourth quarter to the first quarter.
Pallet throughput declined 3% y/y, but storage revenue per pallet was up 2%. The metrics were up 2% and flat, respectively, from the fourth quarter. The company said it’s on track to achieve net price increases of 1% to 2% this year, noting that 70% of its revenue book has already been repriced.
Management said new cold storage space grew 15% from 2021 through 2025, while demand increased only 5%, leaving the market roughly 10% oversupplied. However, new capacity coming online is expected to represent less than 2% of the market this year and next. It said it is experiencing pricing pressure in only 15% of U. S.
markets, which are still considered overbuilt. Adjusted EBITDA of $314 million was 3% higher y/y, with the adjusted EBITDA margin increasing 70 bps y/y to 24. 2%. The company has 22 facilities currently under construction, which will add $150 million in annual EBITDA. (Lineage reported $1. 3 billion in adjusted EBITDA in 2025.)
Lineage reiterated full-year EBITDA guidance of $1. 25 billion to $1. 30 billion, and AFFO per share of $2. 75 to $3. 00. Lineage manages more than 500 facilities with 3. 1 billion cubic feet of space across North America, Europe and the Asia-Pacific region. It also provides freight forwarding, customs brokerage, drayage and truck transportation.
Shares of LINE were up 3. 3% at 11:52 a. m. EDT on Wednesday compared to the S&P 500, which was up 1. 1%. window. googletag = window. googletag || {cmd: []}; googletag. cmd. push(function() {googletag. defineSlot('/21776187881/fw-responsive-main_content-slot3', [[728, 90], [468, 60], [320, 50], [300, 100]], 'div-gpt-ad-1665767553440-0').
defineSizeMapping(gptSizeMaps. banner1). addService(googletag. pubads()); googletag. pubads(). enableSingleRequest(); googletag. pubads(). collapseEmptyDivs(); googletag. enableServices(); }); googletag. cmd. push(function() {googletag.
display('div-gpt-ad-1665767553440-0'); }); More FreightWaves articles by Todd Maiden: Freight capacity plummets, prices skyrocket in April Losses continue at TL carrier Pamt Corp. Schneider targeting significant rate recovery in bid season The post Lineage says cold storage market working through oversupply appeared first on FreightWaves.
Original Source
This briefing is based on reporting from Freightwaves. Use the original post for full primary-source context.
Style
Audience