Are Transload Facilities the Jewel of Industrial Investment Portfolios? (Mike Ferguson - Commtrex Asset Transaction Solutions)

Mike Ferguson (2)

The expansion of e-commerce coupled with the logistics issues experienced over the last few years have brought transload facilities into the limelight as an industrial investment. With shippers looking to optimize operations, transportation optionality has become critical for supply chain efficiency. The more optionality across modes of transportation, the better a facility will be able to adjust to changing market conditions and expand its long-term customer base.

Active buyers of facilities come from a diverse group, resulting in significantly different valuations of active facilities based on the strategy of the investor. Like with any real estate-dependent business, location is critical. With a transload facility, the location relative to markets, storage space, and modes of transportation becomes the focus. Just as critical in the valuation is financial performance and products transloaded, coupled with the quality of customers and customer contracts. As the reduction in greenhouse gas emissions of moving freight by rail relative to truck become more important to shippers, the cost and ESG benefits become clear. Sites served by multiple Class I Railroads are more likely to create competitive pricing and shipping options.

Commtrex is a tech-enabled rail logistics partner with the most extensive network in the rail industry. With more than 3,500 members and unparalleled relationships across the North American supply chain, Commtrex confidentially matches buyers and sellers of logistics assets.