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Buyout gives Bellingham Cold Storage 'horsepower for expansion'

'We've had a desire to grow more than we have for quite awhile,' says CEO, not just in terms of improving existing facilities but also by adding new capacity to serve new customers.

Bellingham Cold Storage (BCS) has been a mainstay in the Pacific Northwest for the seafood industry for decades. And while the company prides itself on consistency, the future may hold some changes under its new Seattle-based owners.

The Seattle-based investment firm Joshua Green Corporation acquired a majority stake in BCS last month, in a move that CEO Doug Thomas said primes the cold storage company for strategic growth.

"We'll have a little more horsepower for expansion projects. I'm really excited about that," Thomas told IntraFish at BCS’s Bellingham offices. "We'll be reinvesting into ourselves and have some outside support to get larger projects done."

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When BCS began seeking out investment last year, several expressed interest, Thomas said, but the BCS’ owners -- the Talbot family – were not seeking just the highest bidder.

"We could have selected a number of different types of investors, however we intentionally went after a family investment house that compliments and maintains the Talbot legacy and the BCS legacy," Thomas said. "It keeps our long-serving employees intact, it keeps our focus on customers, and that translates into us not changing our business service offerings.

"Sometimes a much different approach can happen in acquisitions. That's not going to be the case with BCS," he said.

Following the announcement of the deal, Thomas said calls and emails came pouring in congratulating him on the deal, and praising the choice of the Joshua Green Corporation.

"That made me feel pretty good about our deliberate selection process," Thomas said.

A position of strength

BCS wasn’t standing still prior to the Joshua Green acquisition. It’s made a number of upgrades in recent years to its operations, and worked aggressively to build up and maintain customer relationships, particularly in the seafood, fruits and processed foods industries.

"Our focus has been on high levels of customer satisfaction," Thomas said. "That sounds trite, but seafood companies and all of our customers for that matter, especially here in the Northwest, have very specific needs."

The main hurdles for cold storage customers are consistency and turnaround, Thomas said. BCS developed a service system based on three key performance indicators (KPIs) that serve as an mantra for the entire company: 15, 45, 60.

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The numbers correspond to completion time for critical jobs. When a trucker arrives at the facility's front guard gate, the clock starts. Within 15 minutes, BCS's goal is to have trucks through security, backed up to a dock, and for employees to be loading or unloading product.

Within 45 minutes, inbound trucks should be completed, the product stamped and scanned, and the trucker signing off. On outbound trucks which can include more complex order picking the goal is to have them completed and out the gate in under 60 minutes.

The company applies the same approach to the marine side of the business, Thomas said.

"We want the customers to come in, see us taking their lines, assisting them with homeland security checks, getting gangways in place and beginning discharging," he added. "That's how we tend to attract customers. You can't easily find that level of expediency in the area."

Bringing seafood resources together

What makes BCS particularly unique, Thomas said, is its food processing cluster set up: more than just a storage facility, BCS leases out space to a range of clients directly tied to the food sector.

Among the companies processing in the BCS compound are Trident Seafoods, which operates its San Juan Seafoods plant at the location, Nippon Suisan Kaisha’s (Nissui) FW Bryce, Dana F Besecker, Seafood Producer’s Cooperative and Icy Strait Seafoods.

Several other fruit and dairy producers lease space from BCS as well.

In addition, customs clearance and seafood inspection service operations are based in the compound, which gives BCS the added advantage of being a one-stop shop for companies moving products to markets quickly, particularly those offloading directly from vessels, such as Alaska pollock vessels (American Seafoods’ Ocean Rover is docked at the facility the day of our interview with Thomas).

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Catcher-processor vessels using BCS will typically offload blocks from Bering Sea and Oregon/Washington coastal fishery trips and reload with processing supplies, food and other dry goods necessary for their harvest.

Depending on the crew size, BCS can typically offload a vessel of that size within 24-30 hours, moving upwards of 3 million pounds of product into cold storage.

Trampers can depart directly from the BCS’s Port of Bellingham pier to overseas markets, with around 12-14 million pounds of pollock blocks destined mainly for processors in Europe.

Backtracking to the source

However far BCS clients send their products, the food processing industry’s focus on traceability puts big pressure on the company to do its part tracking seafood on its journey to markets.

The company developed a real-time logistics inventory tracking software, Weboptics, to integrate all of the company’s data, such as catch area, together with the product’s lot number, description, day code, sub-sequence code and even the license plate of the truck transporting the product.

"We can complete a mock recall where a customer will give us 10 random lot numbers, and within about 15 minutes we can tell them where they went, what truck they were on, the trucker's name, the trailer number, and on and on," Thomas said.

"And it's important," he added. "We've all seen examples in the media where that hasn't been the case, and in those incidents where they didn’t know where the product was, you end up recalling everything, instead of just that batch when maybe a bolt fell off a conveyor belt while you were processing that day.”

Solid footing for expansion

The cold storage landscape across the globe remains highly fragmented. While some companies have expanded their footprint dramatically across the globe, BCS has up until now kept its focus regional, and on ensuring its existing companies were given service that catered specifically to their needs.

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The company will continue to invest in its flagship facility on the waterfront, as well a second facility it operates near the interstate, where it might attract other processors, or move further into managed dry storage.

BCS will continue to work towards having a shuttle barge service between Seattle and Bellingham, which would take thousands of trucks off the Interstate-5 corridor each year, Thomas said.

The company is going to keep its service-centric ethos in place, Thomas said, but now has support for taking its offering into new areas.

"We've had a desire to grow more than we have for quite awhile. Not just improving features of our existing facilities but actually growing with new capacity to serve new customers that would like us to move into their neighborhood,” he said. “I can't tell you how many customers have said, 'I sure wish you were in x, y or z location.' We know there's a demand for our service offerings and approach."

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