Ok, enough. I’m tired of arguing with people who have never had anything to do with moving one pound of freight one mile in their life. You know, the people who think they know how to redesign the Chicago Hub although they’ve never been involved with moving a pound of cheese from here to there.
I’d like to start off by talking about a realistic concept. That means I’d like to start off by talking about developing the Cedar Rapids, Iowa market for rail freight transportation. I know I’ve written about Cedar Rapids before. But if we look at developing that market, people with functional brains will realize the concepts for developing that market will be applicable to other markets.
So here we go. Please know and accept that this is just a mental exercise involving something that interests me. If you care to chime in, please feel free to do so. It’s all about having something interesting to do while I’m on lockdown and waiting to be vaccinated. Nothing more. I’d love to go out for a good steak and baked potato, but that isn’t going to happen anytime soon. So……
Let’s start by realizing that Cedar Rapids is in Iowa. Iowa is basically all about producing food (and ethanol). So, we’ll go from there. When you’ve got a rail line through an area you must haul, at a profit, what is produced and consumed in that area. You can’t easily redeploy your assets. Your rail line is where it is. Make the best of it.
I just ran through some numbers from the USDA. (Yes, I am bored out of my mind.) In 2019 Iowa went past Nebraska and became the #1 state for red meat production. (“Red Meat” = pork, beef, veal, and lamb. Veal and lamb are not significant in
This is going to be interesting as to how the rails can capture 45 loads of meat daily to the Northeast, 34 loads to the California/Nv/Az market and 23 loads to Florida from Iowa.
A couple of questions:
Is the meat processed into final products in Iowa? In other words is the meat from Iowa packaged? I seriously doubt if it is on the hook, as the meat arrived at my father’s store back in 1970 (which he then cut into final products). Or does the semi processed meat move from Iowa to locations where it is further processed into final products?
For this to work, there must be a very active backhaul market developed. Are you suggesting that the rails handle this retail aspect of backhauls, or will this be up to the 3PL groups?
Some of the meat is made case ready in Iowa. i.e., you may buy a pound of bacon just as it was sliced and packaged in Iowa. Some of it goes out for further preparation at locations closer to the the retail sale point. Either way, it’s freight out of Iowa. I don’t know of any meat that still shipped on the hook.
Got to use 3PL. Otherwise we’ll spend a decade or more developing backhauls.
OK, I’m not all knowing about this. So I am open to corrections.
But Tyson bought out IBP long ago. As far as I know Tyson has closed the Dennison facility. Farmland (owned by Smithfield) has a large pork facility in Dennison.
I think there is a considerable aggregate demand for ‘larger’ cuts of meat that are then finished or dressed in both specialty and supermarket meat markets. Every Whole Foods I’ve been to (and it’s a big number; I have ‘that kind of wife’) cuts many of its case meats; a number of stores have taken to providing large hanging cuts – small demand individually, but I suspect aggregate demand might be significant, and might increase dramatically if reliable and inexpensive service were to be guaranteed or promised.
I may not see this correctly – but I think all the different options are equally ‘grist for this mill’ – they can all be packed/encapsulated to ride together, and dunned, and even the packaged items would benefit from reasonable CA and temperature control, so in theory all the long-distance units could be common, or different types of unit ‘blocked’ for efficient handling. And they all fill up a train faster together than ‘separately routed’…
Most meat nowadays is shipped in either cyrovac primal cuts for further cutting at the stores or fully cut into retail cuts for sale on the direct sale to consumers. On the production of deli meats it is shipped in 1 ton combo bins of whatever cut that manufactor requires. So if you buy a pork butt from the store that is in a cryovac pack that is how it left the packing plant. Same with any beef cuts like that. Ground meats in those tubes are packaged at the plants.
So, the issue is not where the beef is consumed per se, it is where the next step is in the supply chain. We know that if the meat is going to a big retailer it is going to a distribution center for final mile delivery, probably on the retailer’s own trailer to the store. Thus, the keys are…where is the beef process, and where is it shipped to for final mile.
My guess is that there is considerable LTL movements on the meat, probably more than anticipated…just a guess. I have a customer who is a refer LTL carrier in Chicago. Next time I am in front of them (who knows when that will be) I will engage in topic.
With the distances and volumes involved the economics of double stack, effectively used, will beat any other method of transportation. The relatively recent development by Thermo King of a slim refrigeration unit for containers allows a 53’ rail reefer container to hold 15 rows of pallets vs. the previous 14 rows. This is a critical development because a 53’ highway reefer can hold 15 rows. Rail containers were at previously at a volume disadvantage. That’s no longer the case.
The Chicago Hub exists. We’ve got to use it to an advantage, not as a barrier or a problem. The food from Iowa is going to various east coast population centers from Maine to Florida. Some of it even goes to Canada. The containers need to be sorted for destination somewhere. Chicago is the perfect place to do the sorting. Chicago currently originates expedited intermodal trains to several east coast destinations. Adding Iowa food containers to those existing trains will result in low marginal costs. But it will result in high marginal revenue. Go for it. (If I were doing this for any reason other than fun, I could buy information as to the current truck freight rates. Last time I looked they were damn high.)
To get to those east coast trains we’re going to originate trains at a Cedar Rapids intermodal terminal and run them to a CSX or NS terminal in Chicago. The eastern railroad is going to have to unload the containers from the railcars and then reload such containers on to an outbound train to the desired destination. That’s part of their marginal cost. If the UP can originate a decent block for a particular destination, maybe the unloading/loading thing can be skipped on those loads.
Makes me immediately think of the C&NW Falcons. Any similarity in how the trains or blocks can be made up to facilitate the appropriate ‘comparable’ union understanding?
How do the special 53’ containers with slimlines make it back to Chicago (to be shuttled back to Cedar Rapids) expeditiously to hold the overall cost of containers and service to a minimum? Are there alternate lanes for backhaul that would serve to get them back ‘more profitably’ with the necessary assurance?
What is the point where ‘full loading’ of the 53’ length goes into on-road overload with reefer container plus underframe, vs. TOFC on properly constructed (heavier) van trailers (for the anticipated initial traffic)? Is there a point where there is actual loadout before cubeout for the 53’ containers (unless we’re assuming they will often or always be bulk-broken/cross-docked at the end-terminal “intermodal” facilities rather than promptly sent outbound from there as ‘loaded’ – a case could be made for that)?
I like this discussion, but I see backhaul as being a huge issue. It would be interesting to know the backhaul situation on CSX and NS…how many of these JBH, Schneider, EMP, and other domestic containers are moving empty from the east coast? About the only thing the east coast is producing these days in quantity is trash.
Take a look at the daily Selkirk Columbus train Q635 someday and count the loaded gons of trash. Usually about 70 - 90 per day. Could trash be handled in these containers and then sanitized for food grade? I doubt it.
While containers and covered hoppers are hard to judge, I find that many of the symbol pairs seen through Deshler are loaded in one direction and empty in the other. That includes steel, taconite, coal, coke, autos, oil, ethanol, potash, and grain.
Just double checked my self. The Google maps picture of the IBP (Tyson Foods) plant in Dennison, Iowa shows automobiles accross Lincoln Way, rail cars and trucks on different sides of the plant. It looks like it is still an active plant.
What would be loaded west from east coast cities on the road reefers today? The reefers and tractors are getting back to Iowa at some cost now somehow.
The Tyson plant in Denison no longer slaughters or processes meat. They still do rendering for other Tyson operations. The old operations office building across the street is now a church.
My husband used to haul processed meat like bacon from OH to CA southern produce like peanuts Florida produce frozen foods from plants out east back towards the Midwest. Cool Whip is made in upstate NY along with Yoplait plus whatever they can find to get back to the midwest. Imported produce and dairy goods from overseas is a huge market that OTR drivers haul back from airports to the Midwest. That and Specialty brewed beers are huge backhauls.
Before I hired out on the railroad, I worked for 3 1/2 years for IBP at Perry, IA. It was a two shift operation. First shift did Nippon export. They bought the hogs, directed how the cuts would be made. This went out in ocean boxes.
Second shift did IBP hogs. At the time, IBP did not have a line of case ready meats. You couldn’t buy an IBP labeled product in a grocery store at that time. It all went out for further processing. IBP did have some processing for commercial use, like pizza toppings, etc, but that was done at IBP plants set up to do that. I left before Tyson took over, but IBP was trying to develope a line of meats to be sold in stores with the IBP name.
The Perry plant shipped out via railroad reefers frozen meat. This was done through a subsidiary company in a wing of the plant, called the “freezer” by workers.
Truck load IBP product went out in full truck loads to customers. There were some partial truck loads that would pick up at another IBP plant, or Perry might be the second or possibly third pick up stop. The loads might also at times go to multiple stops for a receiving company. Loads could be either boxes of various sized depending on cut or the big “combo” boxes. I recall pork bellies, among other cuts, usually were in those large combo boxes. (I remember Nestles being a receiver. All I could think of was that they’ld be coming out with a line of chocolate covered port.)
I worked the kill floor for the first six months, then went over to load out doing inventory. I was also trained to load trucks and bill them out. I worked 3rd shift, which usually started shortly before 2nd was done. The rest of 3rd was like greyhounds said, the plant got a thorough cleaning.
One time once everyone else in loadout had left, a truck (actually a container of export meat) came back. It had been picked up out of the