By Jim Romeo, freelance writer for business and technology topics, email@example.com.
In the heyday of rail transportation, President Theodore Roosevelt once said, “A man who has never gone to school may steal from a freight car; but if he has a university education, he may steal the whole railroad.” A whole railroad isn’t as valuable today, as it was then. Railroad’s golden age occurred during the mid-1800s. However, for today’s agricultural shipments originating from the Pacific Northwest, rail transport may be undergoing a railroad renaissance as the cold chain is pivoting from predominately truck transport to refrigerated railcar.
While railroad’s golden age occurred during the mid-1800s, for today’s agricultural shipments originating in the Pacific Northwest, rail transport may be undergoing a railroad renaissance as the cold chain pivots from predominately truck transport to refrigerated railcar.
In the paper entitled “Back on Track? Reassessing Rail Transport for California’s Perishable Produce,” published in California Agriculture, authors from the University of California, Berkeley, noted the transport of perishables, in general, has shifted from rail to truck, but for perishable shipments from California, a reversal appears to be unfolding.
“Transport of perishable produce has shifted from rail to trucking for complex reasons, but the change has not been altogether beneficial for Californians,” they stated. “Indeed, several negative externalities are associated with the truck-based transport of the overwhelming majority of the state’s perishable produce. These externalities include increased air pollution, damage to infrastructure (primarily pavement), and truck crashes that harm public safety.
“If California growers increased their use of rail, significant benefits could therefore accrue to the public,” they continued. “Such a shift might also improve the agriculture sector’s resiliency amid natural disasters. Additionally, if the price of diesel continues to increase (see “Get Ready for Increased Fuel Prices“) and turnover among long-haul truck drivers remains high, a shift toward rail could benefit growers economically.”
USDA also noted in its first quarter Agricultural Refrigerated Truck Quarterly report for 2019 that refrigerated shipment of fruits and vegetables from California (the largest producer of fruits and vegetables in the U.S.) and the Pacific Northwest spiked sharply upward by 21%, bouncing back from a previous stretch of decline. Fuel prices for trucks and improvements in refrigerated transport boosted the volume of produce rail shipment from western points of origin.
Refrigerated rail transportation can have many advantages over the trucking market. Truck transport is currently considered volatile, with factors such as fuel prices and supply and demand forces dictating its availability and price. Meanwhile, a cross-country rail service, dedicated to one market niche, can be ideal for cold chain transport as each string of box cars travel intact and together 24 hours of the day, not broken up at different rail yards, with virtually no delay.
For example, Union Pacific Railroad’s newly acquired subsidiary, Railex, which it obtained in 2017 as part of the company’s Food Network, is described in a story for Iowa PBS as an on-time service that nearly guarantees prompt arrival. Of 170 train starts in a year, the company claims only four late arrivals—all due to “acts of nature” such as flooding and other weather events. With rail transport, there’s more cargo so each railcar carries the equivalent of three to four truckloads of the same produce. The service equates to about 200 truckloads weekly from markets in the west to those in the east.
Pallets of temperature-controlled cargo moves from the boxcar into Railex’s strategically designed cross-dock facility. Cargo is loaded via forklift or pallet jack from either side of the railcar to either side of the cold storage facility onto a refrigerated truck, enroute to its final destination. From the moment the produce is picked, to the time it arrives on the supermarket shelf, the produce move is continuous—the cold chain is unbroken.
Using GPS, Railex can track each refrigerated boxcar wherever it’s located. A dashboard monitors the contents. It may run a report on one boxcar or several, informing on different data in real time, including the temperature. Produce boxes are labeled with RFID and scanned so the specific shipment is also tracked.
“The Railex team developed a fantastic business for changing how fresh food arrives on America’s tables, offering food shippers fast, reliable door-to-door rail-based transportation solutions,” said Brad Thrasher, VP and general manager, agricultural products, Union Pacific, at the time of the acquisition. Railex has facilities in Delano, CA, and Wallula, WA.
Greg Shimonek, the director of rail for cold storage provider Americold and based in Omaha, NE, pointed out there’s also opportunity in perishable shipments beyond produce as well.
“Substantial transportation savings can be achieved by using rail on frozen products,” says Shimonek. “For example, French fries originate in the west and move to the east by carload. Americold is working with both rail carriers and customers to provide rail-served refrigerated warehouse capacity to help our customers reduce their overall supply chain cost. We also see substantial opportunities to provide rail loading capacity for frozen protein shipments moving to the West Coast for export and we are evaluating other key markets.”
The market niche is growing. Just over a year ago, Union Pacific announced it planned to purchase approximately 1,000 refrigerated boxcars featuring advanced technology, with an option to order more if needed. The intended investment marks one of its most significant capital investments in the history of the company.
The whistle is blowing for rail transport and moving the cold chain when it comes to domestic transport. USDA concluded in its report, “Though trucks remain the most common mode of refrigerated transportation, rail and intermodal shipments may become more cost competitive as industry technology progresses.”