CN has done a couple of interesting things with its intermodal business.
First, they’ve got their new Joliet, IL terminal open. This allows direct, expidited on rail service between Prince Rupert, BC and Joliet. In recent years Joliet has become a very significant container “Port” and this let’s CN in the game.
CN has also acquied refrigerated containers. This is a major step. This is a big market. As I’ve made clear, I think the railroads are missing a major market opportunity by not developing the long haul, high volume North American perishable market.
I like two of the selling points on the page from the first link:
CN is also the only railroad directly linking all three coasts to the Greater Chicago area, including vessel calls originating in Europe, Asia, and South America.
and
West coast labor agreement until 2018.
If I was still in the shipping business, I would find those points most interesting.
I work for a Very Large Chain of Grocery Stores aka Kroger. I can tell you this if the CN said we can get your Produce to your DC in 16 days from being Picked I know what our Buyer is going to tell him Get out of Here and do not ever come back. We as a Company strive to have all our Fresh Produce that is picked here in the states at max 5 days from the Field to the Store. Some of it is even Faster if possible. Our Meat is a Max of 4 days from the Plant to the Store if Fresh. The Transit times will have to be a lot Better if CN wants to get into this. We are the second Largest Chain of Grocery Stores in the Nation behind Walmart so I think we have some idea on what to do. About the only thing we would let ride that long is Frozen Foods like French Fries and frozen Veggies.
The 16 day transit time is for movement of a container from China or S. Korea to Joliet. It’s obviously not applicable to domestice movements of fresh produce and meat.
This is very positive. CN and probably the other large railroads as well, are really in the global trade mindset now. I can see this business growing rapidly over the next five years. The really neat thing about shipping food is that everyone needs to eat… so the market is huge.
I asked my Boss how much of a discount we would need to use Railroads for Produce service he said they would need to cut their Prices 75% over Trucking for us to consider them. He got his Info from the head of the Produce Department at the DC. So the Railroads would have to move Produce to the Midwest for next to nothing.
Why the 2 days we would loose from the making up of the trains and then the delivery times would cause us as a company to Lose profits on the Merchandise and also time we can sell it.
I believe the old ICC decided meat being shipped TOFC somehow was unfairly competing with the truckers. I don’t remember their logic, if there was any. I doubt that precedent would apply to boxed beef/pork in containers, but I’m not an expert in this area.
However, I’d suggest there is the old problem of obtaining backhauls from either coast in the required quantity. A triangular route with a short empty leg (say Chicago to western Iowa) might be required.
I was in Joliet today and had a few minutes so decided to invest a little time inspecting the facilities. The intermodal facility is open. There were perhaps about 100 containers in the yard with a few tractors/chassis moving in and out. There is work going on expanding the yard.
The carload yard is busy with considerable amount of cars yarded. Not sure if this is local industry support or actual classification.
The “Salad Shooter” makes the trip in something less than 3 days, I believe. Can’t find the specifics - I think there was an article in Trains about it a while back.
OK, I won’t recommend you for the sales team when it makes the presentation to Kroger.
But, it’s not a big deal to meet Kroger’s required transit times with intermodal service. BNSF can make a 72 hour California to Chicago schedule without breaking a sweat.
I’ll wager $20 against a donut that Kroger is receiving fresh produce by intermodal service now.
Pick it and cool it on Monday. Take it to the intermodal terminal.
Trailer/container leaves on a train late Monday evening.
Trailer/container arrives Chicago IM terminal at something like 1:00 AM Friday. Trailer/container is grounded and out the gate by 5:00 AM.
(I don’t know where your DC is, so I’ll use Cincinnati.) Trailer/container arrives in Cincinnati at 11:00 AM Friday.
Kroger moves the fresh produce through the DC and on to a delivery truck for Saturday delivery to the store.
And that is a perfectly reasonable five day field to shelf movement that will meet your stated requirements. Did I miss anything? Does CNSF have any comments?
CN’s Joliet Intermodal terminal is in the Joliet Yard, former EJE yard. It is in an old neighborhood, just northeast of downtown about 2 miles. Gotta believe the local folks are going to object to all the trucks moving in and out of the neighborhood.
BTW, on an unrelated subject, while in Joliet I briefly stopped by the Joliet Union Station, at the crossing of the CN, BNSF, and Metra (Rock Island). Great old station with UD Tower adjacent. Changes are acomin to Joliet and if you want to see/photo the existing landscape, it wouldn’t be a bad idea to go there. Quite a few trains, including an inbound and outbound Metra once per hour during non peak hours. Peak hours sees quite a few.
“It’s probably a good deal because it opens up more avenues to export pork,” Max Schmidt, a 69-year-old farmer in Elma, Iowa, who raises about 50,000 to 60,000 pigs a year for slaughter. “This is a world economy.”
Shuanghui International Holdings Ltd. agreed last week to acquire Smithfield (SFD) for $4.7 billion. China is the world’s largest pork consumer, and the U.S. exported 23 percent of its output last year, the most since at least 1960, government data show. U.S. producers lost $23 per hog on average in the year through the spring of 2013, the most severe losses since 2009, according to Purdue University in West Lafayette, Indiana."
China’s increasing wealth meets meat for dinner. Meat from the Midwest is meeting the demand. How to get it to the table?
The distance demands frozen, not fresh. Refer trailers run highways from the Midwest to Southern California with export pork. The meat is transferred to ships.
The trucker looks for anything going east. Much of what heads east is fresh, or frozen food stuffs. Dry freight east off the west coast pays poorly. The refer is more likely to get the higher paying temperature controlled back haul.
Is it more economical to ship in the same temperature controlled container all the way to China, or just to port of export and transfer to a ships hold? If container all the way, does this give rail an advantage over truck? Is rail at a disadvantage for container backhauls going east?