Preferred Freezer Services: Very cool automation

Preferred Freezer Services takes materials handling automation to a new level in a New Jersey warehouse.
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The AS/RS features 10 aisles, five cranes and 25,000 pallet positions and operates in an energy-saving, lights-out environment.

By Bob Trebilcock, Executive Editor
February 09, 2012 - MMH Editorial

Preferred Freezer Services’ new 170,000-square-foot warehouse in Elizabeth, N.J., is very 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 Freezer Services (PFS) calls their Generation III warehouse, is also an excellent, and very cool,  example of what automated materials handling can offer in the right environment. It’s not quite a lights-out facility, but it is close. PFS, a third-party logistics provider (3PL), operates the facility with a total of just 30 associates in a 30,000-square-foot area set aside for receiving, palletizing and shipping.

The remaining 140,000 square feet is dedicated to freezer storage. In that area, a 72-foot-high automated storage and retrieval system (AS/RS) manages all of the putaway and order fulfillment processes in the dark. It truly is lights-out automation.

“We think we’re perfecting the warehouses of the future,” says John Galiher, PFS’s CEO and president.

The AS/RS (with cranes from LTW Intralogistics, ltwusa.com, and rack from Frazier, frazier.com) features:

  • 25,000, eight-foot-tall pallet positions,

  • 10 aisles, and

  • five cranes. Three aisle-changing cranes service the rack system and two cranes deliver pallets to and from the dock and a buffer area in the freezer.

The system manages more than 2,000 stock keeping units (SKUs) from multiple clients. It receives, palletizes and ships up to 1,020 pallets in and 1,020 pallets out of the facility each day.

It is the fifth automated warehouse PFS has put up in recent years, with more planned.

However, that’s not to say that all of the 3PL’s facilities are lights-out spaces. “We don’t automate just to automate,” says Galiher. He points out that PFS still operates conventional freezer warehouses and has built a hybrid facility that mixes automation with semi-automation. “For us, the drivers are empirical data and flexibility,” he explains. “If we are handling products that are challenging in an automated environment, we’ll go at it in the old fashioned way, with very narrow aisle storage as high as we can go.”

Two decades of growth
Founded by Galiher in 1989, PFS has provided 3PL services for frozen food companies for 22 years. The company got its start in a 2.3-million-cubic-foot warehouse in Perth Amboy, N.J., with 25 full-time employees and $3.6 million in revenues.

It has since expanded to 27 facilities, more than 1,300 employees and over 200 million cubic feet of warehouse space located in nine regions in North America. The company continues to grow: With sales exceeding $200 million a year, PFS has six additional domestic facilities on the drawing board and is now operating temperature-controlled warehouses in China and Vietnam. “We’re growing at compound growth rate of 15% to 16% a year in an industry that’s growing in the low single digits,” Galiher says. “We believe it’s because we’re building state-of-the-art warehouses in strategic locations.”

Changes in the food industry led to an evolution in the types of facilities that PFS develops and operates. “Seven or eight years ago, our biggest customers began looking to their supply chains to reduce costs and drive operating margins as an alternative to developing and launching new products,” says Galiher. “Warehousing and distribution went from an expense that was largely ignored to a part of their business model to improve profitability.”

At the same time, he adds, operating costs for 3PLs continued to climb. The cost of land went up. Construction costs climbed. And, the overall cost of labor rose, including the cost of benefits, worker compensation, benefits and protective gear for those working in harsh environments like refrigerated and freezer spaces.



About the Author

Bob Trebilcock
Executive Editor

Bob Trebilcock, executive editor, has covered materials handling, technology and supply chain topics for Modern Materials Handling since 1984. More recently, Trebilcock became editorial director of Supply Chain Management Review. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.


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