Preferred Freezer Services’ new 170,000-Psquare-foot warehouse in Elizabeth, N.J., isvery cool.That may sound too cute by half. After all,it’s a freezer warehouse: It’s more than cool.It’s downright bone chilling.But the design, which Preferred FreezerServices (PFS) calls their Generation IIIwarehouse, is also an excellent, and very cool,example of what automated materials handlingcan offer in the right environment. It’snot quite a lights-out facility, but it is close.PFS, a third-party logistics provider (3PL),operates the facility with a total of just 30associates in a 30,000-square-foot area setaside for receiving, palletizing and shipping.The remaining 140,000 square feet isdedicated to freezer storage. In that area, a72-foot-high automated storage and retrievalsystem (AS/RS) manages all of the putawayand order fulfillment processes in the dark. Ittruly is lights-out automation.“We think we’re perfecting the warehousesof the future,” says John Galiher, PFS’s CEOand president.The AS/RS (with cranes from LTWPreferred Freezer Services’CEO and president, JohnGaliher (center), believes the3PL is developing the freezerwarehouse of the future.Featuring a 72-foot-tallAS/RS, the facility relies onjust 30 associates to operate24 hours a day.mmh.com MODERN MATERIALS HANDLING / F E B R U A R Y 2 0 1 2 17
MODERN system reportThe AS/RS features 10 aisles, fivecranes and 25,000 pallet positionsand operates in an energy-saving,lights-out environment.Intralogistics, ltwusa.com, and rackfrom Frazier, frazier.com) features:• 25,000, eight-foot-tall pallet positions,• 10 aisles, and• five cranes. Three aisle-changingcranes service the rack system and twocranes deliver pallets to and from thedock and a buffer area in the freezer.The system manages more than2,000 stock keeping units (SKUs) frommultiple clients. It receives, palletizesand ships up to 1,020 pallets in and1,020 pallets out of the facility each day.It is the fifth automated warehousePFS has put up in recent years, withmore planned. However, that’s not tosay that all of the 3PL’s facilities arelights-out spaces. “We don’t automatejust to automate,” says Galiher. Hepoints out that PFS still operates conventionalfreezer warehouses and hasbuilt a hybrid facility that mixes automationwith semi-automation. “For us,the drivers are empirical data and flexibility,”he explains. “If we are handlingproducts that are challenging in anautomated environment, we’ll go at it inthe old fashioned way, with very narrowaisle storage as high as we can go.”Two decades of growthFounded by Galiher in 1989, PFS has provided3PL services for frozen food companiesfor 22 years. The company got itsstart in a 2.3-million-cubic-foot warehousein Perth Amboy, N.J., with 25 full-timeemployees and $3.6 million in revenues.It has since expanded to 27 facilities,more than 1,300 employees andover 200 million cubic feet of warehousespace located in nine regionsin North America. The company continuesto grow: With sales exceeding$200 million a year, PFS has sixadditional domestic facilities on thedrawing board and is now operatingtemperature-controlled warehouses inChina and Vietnam. “We’re growing atcompound growth rate of 15% to 16%a year in an industry that’s growing inthe low single digits,” Galiher says.“We believe it’s because we’re buildingstate-of-the-art warehouses in strategiclocations.”Changes in the food industry led toan evolution in the types of facilitiesthat PFS develops and operates. “Sevenor eight years ago, our biggest customersbegan looking to their supply chainsto reduce costs and drive operatingmargins as an alternative to developingand launching new products,” saysGaliher. “Warehousing and distributionwent from an expense that was largelyignored to a part of their businessmodel to improve profitability.”At the same time, he adds, operatingcosts for 3PLs continued to climb.The cost of land went up. Constructioncosts climbed. And, the overall cost oflabor rose, including the cost of benefits,worker compensation, benefitsand protective gear for those workingin harsh environments like refrigeratedand freezer spaces.Automation evolutionOver the last decade, PFS developednew warehouse designs. In 2000, the3PL developed the design for a 60-foottall,semi-automated, very narrow aisleDC. “The Generation II design wastaller and squarer than the 42-foot-tall18 F E B R U A R Y 2 0 1 2 / MODERN MATERIALS HANDLING mmh.com