“The railroads, historically, are looking for someone else to make the investment,” Finkbiner said. “People like us.”
In most cases, Tiger Cool Express can meet truck transit times plus one day.
“For the vast majority of produce commodities that’s OK,” he said.
And the containers can be double stacked.
“You can put one on top of another, and that provides the railroads a chance to price in a manner that’s much more efficient than putting a single trailer on a flat car,” he said.
The containers have a 6% or 7% weight disadvantage compared to reefers, he said. But even still, there’s cost savings.
Supermarkets operate on notoriously low margins, he said.
“If you can buy your transportation at 5% to 7% per hundredweight below what you’re buying it for now, you’ve just tripled your money.”
Rail Logistics shipped produce in boxcars for many years before launching a domestic intermodal program four years ago, Boss said.
The company felt that long term, domestic intermodal would be more efficient, he said.
There may be times when truck transportation may be more efficient, he said, but intermodal gives shippers more choices.
“It really opens up a whole new ballgame for produce shippers because now they can use expedited intermodal trains to ship their produce cross-country, or they can still use long-haul trucks,” he said.
“Domestic intermodal is a much-needed way to add capacity for the produce industry to move their products,” Boss said.
Motivated by savings
Tom Kovacevich, general manager of TM Kovacevich-Philadelphia Inc., said cost savings was the prime motivator for the company’s decision to give intermodal transportation a try for some of its citrus and vegetable shipments.
“We work on very, very thin margins in our business,” he said, “so anywhere we can save even a percent or two off the total is very important motivation.”
Kovacevich estimates that he saves 10% to 20% on freight costs compared with using trucks alone.
The company only has been using the service for a couple of months, and ships about 5% of its citrus and vegetables with intermodal. Kovacevich believes that figure will increase in the months to come.
“There’s no question in my mind that it’s going to become much more prolific and a much larger percentage of the industry will be using it,” he said.