“We’re trying to follow the peak season and provide supermarket buyers with something they haven’t had before — the same party that can move tomatoes from Southern California can also move tomatoes from south Texas and south Florida,” he said.
Finkbiner cites U.S. Department of Agriculture statistics that say that 2% of produce now is shipped by rail. He predicts that within the next 10 years, intermodal should pick up at least 30% of the current reefer truck capacity over 1,000 miles.
“We’re really bullish on the business,” he said.
Rail Logistics LLC, with its Cold Train Express Intermodal Service is another operator that is bullish on the business.
Farmington Hills, Mich.-based Federated Railways Inc., an affiliate of Federated Capital Corp., announced in March that it has entered into an agreement to acquire the assets of Rail Logistics. The new subsidiary will be called Federated Cold Train LLC.
Patrick Boss, director of public affairs for Rail Logistics, sees only good things from the acquisition.
“The company will do what it’s always done, just owned by a new entity that is going to put more capital into the company so it can buy more containers, etc.,” he said.
Rail Logistics now has 450 containers and will add 150 in the near future and 1,000 over the next five years,
The company, which now primarily serves the Pacific Northwest, plans to start servicing intermodal ramps at two locations in California — the Stockton area in the north and San Bernardino in the south — by late May or early June.
Federated Cold Train will haul to the same places from California as it does from Oregon and Washington — about 20 states in the Midwest and on the East Coast.
“Expedited trains leave Washington and Oregon six days a week,” Boss said. The same will be true out of California.
All the trains go through Chicago, where cargo is trucked to adjacent states or switched to other trains for shipments to states farther away.
All four major U.S. railroads have an interest in serving the produce market “because it’s a market they understand they’ve lost,” said Finkbiner of Tiger Cool Express.
But railroads typically don’t have the money to spend on intermodal systems. They have to spend their capital dollars on their rail infrastructure, he said.