A new warehouse in Kansas City, Missouri, that opened this month is doing more than holding chilled and frozen food. It’s also providing a blueprint for a type of industrial property that could be more in demand after a successful merger of railroads Union Pacific and Norfolk Southern.
The warehouse was developed by Americold Realty Trust, a real estate investment trust that specializes in cold-storage facilities, in a partnership with railway Canadian Pacific Kansas City. The property is Americold’s first import-export hub with a direct link to CPKC, the only rail network run by a single company that connects Canada, the United States and Mexico.
The creation of a cross-continental network, operated by a single railroad, with these kinds of warehouses is critical for shippers, said Rich Thompson, international director of supply chain and logistics solutions at property services firm JLL. Such a setup allows for faster, cheaper shipments of automobiles, grain, liquids, lumber, machinery and other freight typically hauled by railcar. The proposed Union Pacific-Norfolk Southern combination would create a similar network connecting the Atlantic and Pacific coasts under the control of one rail company.
“There is some real upside for shippers” in the Union Pacific-Norfolk Southern merger, said Thompson, who wasn’t involved in the Americold development in Kansas City. And that involves more refrigerated warehouses like the one in Kansas City that can handle shipments by both rail and truck.
Union Pacific said last month it agreed to buy Norfolk Southern for $85 billion. The deal requires regulatory approval and is expected to close by early 2027.
Although the Trump administration’s policy of seeking higher tariffs has roiled the flow of goods imported to the United States from Canada and Mexico, manufacturing and distribution companies are still trading products and are always hunting for more efficient shipping methods, Thompson said.
Freight trains provide a viable option that, as of now, some real estate professionals consider underutilized. Trucks control about 85% of all freight movements worldwide, and commercial truck crossings at U.S.-Mexico border ports reached record levels in 2024 — and are on pace to match or break those records this year, according to a new report from brokerage Marcus & Millichap.
But trains can move large quantities of heavy goods much more efficiently than trucks, according to LJA Engineering, a Houston-based consulting firm that works on transportation real estate developments.
“Rail is particularly effective for bulk commodities and containerized goods traveling great distance,” LJA said in a report in April. “A single train can replace hundreds of trucks, delivering substantial economic and operational benefits.”
More chilled hubs
Americold’s new $127 million cold-storage warehouse is near the Centerpoint Intermodal Center in South Kansas City. It features on-site food inspections by the U.S. Department of Agriculture to eliminate delays at the Canadian and Mexican borders, according to Americold.
It holds strategic importance for CPKC’s Mexico Midwest Express as the only single-line rail service for refrigerated goods between the U.S. and Mexico, Americold said.
The Kansas City property is the first of several chilled import-export hubs that Americold plans to build across North America with direct links to railroad networks. The Atlanta-based REIT declined to identify potential locations but said it is looking at western Canada and Mexico.
Americold owns and leases properties that it then charges rent and storage fees for to customers using the warehouses for their frozen and perishable food items and other products, the REIT said. Americold declined to name the customers of its Kansas City hub but said they include “many of the largest pork and beef producers in the U.S.”
The new breed of logistics properties, such as Americold’s 335,000-square-foot property, “have evolved from simple loading docks to sophisticated hubs, which can include automated handling equipment and advanced management systems,” according to LJA. LJA was not involved with Americold’s new facility in Kansas City.
“By positioning these facilities near population centers, civil engineers can seamlessly merge rail and … trucking to provide targeted distribution flexibility,” LJA said.
In turn, commercial real estate investors are targeting cold storage, truck yards and logistics hubs in places that are important to U.S.-Mexico-Canada supply chains, Marcus & Millichap said in its report.
North-south line
A major distinction for Calgary-based Canadian Pacific Kansas City’s network is that it runs north-south, whereas the Union Pacific and the Norfolk Southern network would run east-west. But the concept is the same — companies that ship freight on railroads can do it more efficiently when the railcars run on only one rail network, Thompson said.
“You won’t need two train conductors,” Thompson said. “There will be fewer interchanges, fewer bottlenecks, and service will improve. That could potentially lead to costs coming down” for shipping customers.
If Union Pacific and Norfolk Southern complete the merger, other types of industrial development projects are also likely to pop up along their Atlantic-Pacific network, Thompson said.
One type is intermodal properties that facilitate the transfer of goods between railroads, trucks and airplanes. Two of the largest that have opened in the U.S. in the past decade are Norfolk Southern’s Rickenbacker terminal in Columbus, Ohio, and Hillwood Properties’ AllianceTexas near Fort Worth, Texas.
CPKC is pursuing more developments like the Americold facility in Kansas City. The railroad’s Room to Grow program aims to use its 6,000 acres of property along its network in the United States, Canada and Mexico that have “promising industrial development potential,” according to the company.
Americold’s new facility on the Canadian Pacific Kansas City line is expected to significantly enhance regional and cross-border food logistics and serve as a consolidation point for longer-haul shipments, including flows from Canada to Mexico for customers facing border inefficiencies or trucking capacity challenges.
“This is more than infrastructure — it’s a fully integrated solution that connects food producers to consumers faster and more efficiently,” Americold CEO George Chappelle said in a statement. “Simply put, we’ve unlocked a better way to move food.”