Lineage Logistics IPO Could be a Major Score for Retail Investors (2024)

A Lineage Logistics IPO is coming. And this could be a big one.

Before I tell you why I’m bullish on this one, let me tell you a little bit about the company.

Lineage Logistics is the largest temperature-controlled industrial REIT in the world. With a portfolio of more than 400 operational facilities boasting more than 2.5 billion cubic feet of space throughout Europe, Asia and North America, it’s no slouch.

Of course, Lineage isn’t the only temperature-controlled logistics company out there. But it’s the biggest. And its facilities are the most technologically advanced in the world. This is important because the future of logistics will be one built on energy and operational efficiency. Things that don’t currently exist in the older, more traditional temperature-controlled logistics industry. But in order to stay competitive in the coming years, energy and operational efficiencies will not be an afterthought. They will be integral to survival.

Most of this is the result of soaring energy costs. As I noted last week, the IEA has predicted a significant increase in energy demand in the coming years. This is the result of the rapid growth of the EV market and a significantly higher level of electricity consumption from AI and cryptocurrency operations. Which, by the way, could double in just two years.

This, dear reader, is exactly what Lineage has been preparing for.

In fact, nearly ten years ago, Lineage began experimenting with new technologies that would allow it to lower its energy costs. Researchers highlighted those experiments in a Food Logistics report back in 2018. Here are some highlights from that report…

• Reduction in absolute energy and energy per unit of food.

Since 2014, Lineage cuts its yearly energy costs by 8 percent at 78 of its warehouses where it integrated new energy efficiency technologies. Unexpectedly, the throughput at these facilities increased over the same time period, meaning that the cost of electricity used for each item of food decreased by 34 percent.

• Energy reduction during afternoon peak usage times reduced costs.

Electric utilities can add a “demand charge” (a high rate or extra fee) during peak usage times. These are typically during hot afternoons when the need for air conditioning is high. On the flip side, utility companies often also reduce costs when temperatures drop in the evening. Using data from one of its partners, Lineage was able to recognize these patterns and “super-cool” their warehouses during low-demand time at night. This created a virtual ‘battery’ of coldness, allowing Lineage to turn off its cooling equipment and use less energy during peak hours.

• Faster blast freezing.

During peak strawberry season, Lineage blast freezes 4-6 million pounds of strawberries each day. This process is important to improve food quality and reduce the likelihood of pathogens. But it consumes a lot of energy. So Lineage added sensors to its freezers and began tracking the freezing process. The result was a reduction in average freeze time from nearly 100 hours to about 50 hours. This translates into a 50% reduction in energy usage.

Of course, technology has come a long way since then. And while the company’s early efforts to rein in energy costs are still utilized today, it’s now also a leader in automation and AI in the logistics industry. Utilizing next-generation robotics, artificial intelligence and machine learning, Lineage has raised the bar on reducing energy consumption, optimizing warehouse operations and improving delivery times.

Why the Lineage Logistics IPO Matters

Planning for the future, instead of falling victim to it, is what has made Lineage a dominant force in logistics. So when I heard the company was preparing for an IPO, I had to find out more. If the share structure is legit, and they don’t overprice the IPO, Lineage could prove to be an excellent long-term investment.

After all, with growing populations in emerging markets, where consumers can now afford access to foods and beverages that just ten years ago were nearly impossible to procure, the demand for temperature-controlled logistics is in no danger of declining.

And if you look at the competition in the space, Lineage is the most technologically-advanced, and the most well-funded. To date, the company has raised in excess of $13 billion. And nearly $7 billion of that coming in over the past three years.

Lineage is reportedly targeting a $30 billion valuation in an IPO later this year. This would make it one of the biggest IPOs in 2024. So there will be a lot of attention on it. Which is why I’m telling you about it now, just to get you up to speed.

Details are still pretty limited, right now. But in the coming months I expect to see more coverage on the Lineage Logistics IPO. And of course, we’ll keep you posted as things develop.

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To a new way of life and a new generation of wealth…

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Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.

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