A new company, Rail Logistics LLC, is setting up a new reefer container service from Quincy, WA (near Wenatchee, WA) to a distribution center in Cicero, IL (Chicago).
It does seem to have some potential. We’ll see how well it does.
Perhaps someone could tell us about the distribution center in Cicero. The big difference will be that instead of being loaded into refrigerator cars, the produce will go into 53-foot containers (probably twice as many needed to handle the same volume). Is the distribution center at this end a warehouse? Otherwise the produce will have to be organized into containerloads out west, for delivery to individual shippers here.
I’ve seen some of this company’s refrigerator cars out here every once in a while. They’re at least fourth-hand ex-PFE reefers, probably near the end of their original 40-year life.
The Cicero end smells of BNSF’s ex-BN/CB&Q pig yard and a short dray out the gate. Wonder if they have a private gate in and out to avoid the checkpoint (UPS has one at Hobart/BNSF in LA)?
I doubt there will be any DC in Cicero. The containers will be put on a chassis at BNSF’s intermodal terminal there and then be drayed to the grocery chains’ own distribution facilities. (As an example, Jewel is the SuperValu brand in Chicago. Their DC is in Melrose Park.) At the grocer’s DC the solid loads of Washington apples will be unloaded and sorted in to delivery trucks for movement to individual stores. They’ll ride in the delivery trucks along with carrots, potatoes, lettuce, bananas, etc which also arrived at the DC as solid loads from origin. That’s what the grocery distribution centers do. They break down solid loads of inbound sustenance and sort it for the delivery runs to individual stores. That’s how they handle the inbound over the road trucks today.
I don’t see this as so much of a RailEx competitior as a competitor to trucking. Trucking is still the far dominant method of moving this produce thousands of miles. That’s going to change. Particularly for food such as apples and frozen potatoes which can stand an extra day of rail vs road transit.
There are still a lot of questions about this operation. I see they bought 70 containers. I also see a proposed six day per week schedule. I
Not long ago, Quincy, WA, shippers tried unsuccessfully to launch a westbound lane for containers to Puget Sound. Everything I’ve read about that indicated too few boxes across too short a distance to be competive with trucks, and not enough to be worth BNSF having a ZCHCSSE or port-bound stack train pick up. Only other options would have been the Spud Local, which runs up Trinidad Hill from Wenatchee to switch Quincy, or MSPOEVE. Spud Local would have only gathered the containers for later pick up by a through train anyway.
Containers eastbound from Quincy, however, make tremendous sense for the long haul. And Quincy already has a huge head start on this business above what Railex had when it broke ground at Wallula. Despite being located in the heart of a productive farm region, Wallula’s rail business prior to Railex was limited mainly to a pulp/paper mill, a nearby barge transfer port for unit grain shuttles, and a junction point with small yard where BLMR traffic out of the Walla Walla area is interchanged with UP. This interchange can often be enough to swell a 30 or 50 car MSKHK out of Spokane to a 140-car monster. There had been a serious lack of facilities at Wallula to load local traffic into railcars, until Railex came along.
Quincy, on the other hand, has a number of large, well-established packing and warehousing facilities with existing rail service. Most of the customer base has been bringing their product there for years. Just a track or two with room to maneuver containers on and off and they’re ready. As was pointed out earlier, this should be advantageous at the receiving end, with no need for forklifting pallets out of reefers, across the warehouse floor, into trucks.
Greyhound:
Perhaps the containers will move direct to the DCs in Chicago such as Jewell, Dominicks, and Centrella, but there should also be considerable amount of cross docking of the product. Have you been to the fruit and vegetable market area on Blue Island Avenue between Damen and Western Ave? It replaced the old market between Racine and Halsted which are now condos.
There is considerable amount of inbound fruit/vegetables to this and adjacent locations (on Blue Island Ave and also Romano Bros has an incredible facility on Ashland Avenue where the old IC IMX was located). There are a number of fruit/distributors in Chicago that handle not only the large grocery chains but also the smaller independents and food service requirements.
I can see this expanding. The Cicero location makes quite a bit of sense.
If you get a chance, drive down the Blue Island Avenue between Ashland and Western and you will see the dramatic changes which have occured the last 10 years. While you are in the area, stop at Micellis Deli at 2448 South Oakley and grab a bite. Louie has the 3rd best Italian Sub in Chicago and his special on Tuesdays (Italian Sausage, potato, onion, peppers) is outstanding.
Ed
Yes, you’re right. I didn’t do a very good job with that reply.
The point I was trying to make was that this new container service will not require any new fixed facilities, such as a perishable product distibution center in Cicero, IL. The boxcar serivce used by RailEx would require such a facility. Since one of the goals will be to keep costs down, not needing new/renovated buildings will give an advantage to the container service when compared to reefer boxcar service.
That’s what I was trying to say. I guess I used a poor exampe to demonstrate the point. All food arriving Chicago doesn’t get retailed through the major grocery cha
Greyhounds makes some very valid points:
"… don’t see this as so much of a RailEx competitior as a competitor to trucking. Trucking is still the far dominant method of moving this produce thousands of miles. That’s going to change. Particularly for food such as apples and frozen potatoes which can stand an extra day of rail vs road transit.
There are still a lot of questions about this operation. I see they bought 70 containers. I also see a proposed six day per week schedule. I don’t see how they can give the BNSF any real daily volume out of Quincy with only 70 containers. But that’s just a question I have. They’ve obviously got something worked out. (I hope.)
They have three big advantages over RailEx’s carload operation. 1) They’re going to be able to load the containers both east and westbound. So they’ll get paid in both directions. RailEx is still going back west with mostly empty equipment. Empty (non-revenue) miles just kill you when you’re handling truck competitive freight. 2) They don’t need those expensive facilities to transfer the freight between truck and rail as RailEx does - they can use the existing rail intermodal terminals. 3) They’re not tied in to fixed facilities to the extent RailEx is. They can get closer to the customer on the rail. This cuts their drayage expense as compared to RailEx. And drayage is THE killer expense when it comes to being truck competitive…"
1.) I find the mention of purchasing only 70 refer containers for a 6 day a week service troubling. Carl mentioned that they also have some recycled reefer cars. For the service frequency proposed they will need a lot of equipment.
2.) That produce business is
My guess is there will be a cross dock operation somewhere near the Cicero terminal. I agree with Greyhound there will considerable direct loads of container to facilities. But, a very large percentage of the fruits and vegetables are cross docked for delivery. There just isnt enough volume to build container loads for direct delivery.
The produce distribution business is very interesting. Greyhound, please do take a drive down by the IMX sometime and you will be amazed at the number of small and medium sized family owned businesses. Some, like Romano are pretty good sized. Most have a niche and might have 3-6 trucks for delivery. No doubt at sometime consolidation in the industry will occur.
Did anyone ever go to the old produce association down on Racine? It was pure capitalism. To the same degree, one can go to the meat district (Water Market) around Randolph and Halsted. Better hurry as the loft crowd is pushing the meat distributors out of the area.
Sometime when you have an hour and are downtown, head across the Ryan/Kennedy and just drive around the Halsted/Racine-Lake Avenue area. There are dozens of meat distributors, all family owned in the area. Some have retail walk in operations. Interesting.
Regarding the 70 containers…my guess is they started with 70 and will lease a substancial larger number to begin the operation. How many loads/day will 70 container support when figuring in the load/unload and transit times? Can a container make a round trip in 14 days? I dont think so, particularly if they are attempting to load out of Chicago and unload in PNW. Thus the 70 containers would support perhaps 5 loads daily (unless my logistics reasoning is incorrect). Leased containers will probably be used.
Which leads me to another subject.
Some good info has been posted here. I must assume that BNSF isn’t going to run a dedicated double-stack for the traffic. That would be a very short train. Don’t suppose the produce is quite as time-sensitive as Boeing parts (I have seen one-car trains!). If anyone gets a picture of the new containers, please post. I’ll watch for them in Montana.
Hays
Well, here are some pictures of one of the containers.
http://www.rrlx.com/www.icoldtrain.com/iColdTrain/Container.html
[quote user=“MP173”]
My guess is there will be a cross dock operation somewhere near the Cicero terminal. I agree with Greyhound there will considerable direct loads of container to facilities. But, a very large percentage of the fruits and vegetables are cross docked for delivery. There just isnt enough volume to build container loads for direct delivery.
The produce distribution business is very interesting. Greyhound, please do take a drive down by the IMX sometime and you will be amazed at the number of small and medium sized family owned businesses. Some, like Romano are pretty good sized. Most have a niche and might have 3-6 trucks for delivery. No doubt at sometime consolidation in the industry will occur.
Did anyone ever go to the old produce association down on Racine? It was pure capitalism. To the same degree, one can go to the meat district (Water Market) around Randolph and Halsted. Better hurry as the loft crowd is pushing the meat distributors out of the area.
Sometime when you have an hour and are downtown, head across the Ryan/Kennedy and just drive around the Halsted/Racine-Lake Avenue area. There are dozens of meat distributors, all family owned in the area. Some have retail walk in operations. Interesting.
Regarding the 70 containers…my guess is they started with 70 and will lease a substancial larger number to begin the operation. How many loads/day will 70 container support when figuring in the load/unload and transit times? Can a container make a round trip in 14 days? I dont think so, particularly if they are attempting to load out of Chicago and unload in PNW. Thus the 70 containers would support perhaps 5 loads daily (unless my logistics reasoning is incorrect). Leased containers will probably be used.
Which leads me to another subject. How much freight is destined to the PNW termina
I wont take that bet, but would agree to buy you a hot dog, Italian Beef, or sub when you are going to the cell. Given today’s commercial real estate market and the availability of existing facilities, I doubt if there will be any new construction. My guess is there is available space going to be utilized…cheaply.
Regarding the volume moving out of the area, my friend had no idea of total volume, but described it as “a lot”, then added that Walmart moved over 400 loads in Dec out of that area. Her take was there are huge food DCs in the PNW which will support westbound movements of refrigerated loads. Produce east, meats west seemed to be the operation.
Would the economics support the following?
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Load from Wenatchee to Chicago.
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Return load of meat to Seattle.
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Drayage to destination and move empty container to Wenatchee
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Start over.
Would this be what the truckload guys are doing now? If so, would the drayage from Seattle to Wenatchee (empty) be unreasonable for this to work?
Anyone know what a refer load pays for such a haul?
Ed
ED; Don’t know what the current price is, but about 7 years ago I was booking out of Central Washington for rates in the 1.10 to1.30 per mile for team freight in reefers back to midwest and east coast. The farther east the load went the more they paid with frozen seafoods being the best paying loads. Potatoes were about the lowest payers.
Looking at the link Greyhounds provided for the Cold Train website, under news there are a couple of newspapers quoted. The Kansas City Business Journal, and the Puget Sound Business Journal. The KCBJ mentions that one of the imparatives for this service was that the BNSF would give them a stop off in Quincy, Wash ( at the Intermodal Terminal/Yard) then run direct to Chicago. That makes me think that this will not be on a dedicated train, but a regular scheduled one, unlike UP’s service.
Here is a link to the KCBJ article:
http://www.rrlx.com/www.icoldtrain.com/iColdTrain/KCBJ.html
and here is a link to the PSBJ (Seattle) article:
Some years ago, BNSF was known to run an occasional SWENCHC train out of Wenatchee. These were fairly long, but I question whether the Wenatchee area could actually generate that many container loads on even a once-a-week basis, when so much of its produce is already moving out by truck. These trains more likely involved local containers being added to a block of Tacoma/Seattle containers and the train being reclassified for Wenatchee (the same way BN used to reclassify intermodal, manifest, and grain symbols after they made substantial pick ups or got yard-worked en route). But don’t discount the value of Wenatchee area produce being expedited by rail. Remember, not long ago, Amtrak was having No.8 pick up several high-speed refrigerator loads at Wenatchee for the trip east.
The challenge for Rail Logistics to live up to its advertised schedule will depend on what kind of handling it can get out of BNSF. Z trains between South Seattle and Chicago and J trains handling Boeing aircraft components are the hottest things on this route; everything else is stacks, vehicles, and a manifest. Zs already stop at the Parkwater ramp in Spokane to pick up additional trailers. (USPS and UPS service across the northern tier is terrific; our mail to and from folks in New York typically takes half as long as parcels to/from California or Arizona.) I question whether BNSF would jeopardize its ZSSECHC schedule by adding a stop at Quincy. Might make more sense if some other eastbound with a less sensitive schedule forwarded the Quincy cars to Parkwater, where they could be added to the Z’s existing pick-up. Not the best service from RL’s standpoint, but makes more sense for BNSF.
Rail Logistics already has a container loading facility in place at Quincy, built some four or five years ago for that Puget Sound service that never panned out. What remains to be seen is whether this thing really gets off the ground. RL has issued its press release and
Each caters to a different customer. The RL project caters to those who can handle container sized lots while Railex handles smaller shippers and others that want or need a diverse shipment of smaller lots. Not everyone can handle or want a full container of a single product. Each has its place in the world.
As far as back hauls, there is plenty of beef out here in Washington. Sorry to burst your Chicago bubble, but is NOT the meatpacking center of the world anymore. There is a better chance of getting a backhaul from the east coast, European or African products. I think there is a better chance of growth that way.
Yes, there’s plenty of beef out there in Washington. But there’s very limited pork production anywhre on the west coast. Additionally, Japan and other Asian countries are good markets for US pork exports. Packaging and handling methods have been developed that allow fresh pork to be shipped to Asia via container ship. Seattle will do just fine as a port for this international trade.
US pork production is centered in the Midwest and North Carolina.
And don’t forget the dead chicken potential.
As far as Rail Logistics being limited to container sized shipments, they’re not. Smaller lots can be consolidated in a container just as they can be consolidated in a refrigerated boxcar. The container even has advantages over the railcar for this type of shipment. With the container each small lot can be delivered directly to the receiver with no need for cross-docking at destination. The destination drayage company simply makes stops for partial unloading en route to the final receiver (Whoes freight will be near the front of the container.). Can’t do that with a boxcar.
If this is going to be a dedicated service from Quincy to Cicero with only seventy containers I wouldn’t be surprised if the containers were kept on the trailer chassis. It would save some time with the loading and unloading. Also, pickups at Spokane, Minneapolis, etc. can be made enroute if needed.
Are any loads going to continue east beyond Chicago using either CSX or NS?
CC
Yes, about a year ago our “Competitive Inteligence” figured the average temperature controlled motor freight rate from Yakima to Melrose Park, IL (Site of the SuperValu Chicago area DC) to be $1.23/mile plus $0.27/mile fuel surcharge.
Why would a load of potatoes pay less than a load of apples?