Stephanie Nall -- CoolCargoes.com -- May 5, 2009
The commercial viability of shipping refrigerated cargoes by rail is getting a big boost from private investment.
Railex, a company that sends refrigerated trains of 55 railcars between enclosed refrigerated rail terminals on the West Coast and upstate New York, added a third weekly service this week.
Railex began operating between Wallula, Wash., and Rotterdam, N.Y., in 2006. Last fall, the company opened a $30 million terminal in California’s central valley.
The facility, in Delano, like the terminals in Washington and New York, is big enough for a train to pull into and unload and load cargoes in a temperature-controlled environment. Storage rooms keep goods at different chilled and frozen temperatures. The service between Delano and Rotterdam proved so successful that Railex offered a second weekly service between the two points.
Railex provides the 64-foot cars, the terminals and the marketing. Union Pacific and CSX Transportation engines pull the trains between the terminal points in five days.
“The second weekly service is starting just as a lot of fresh California produce is starting to be harvested,” said John Philp, assistant vice president for food products at UP. “It may be that the second weekly service will end up being seasonal.”
Out of the Washington area, nearly all the farm goods moved by Railex are storage crops — potatoes, apples, pears and onions that are harvested, put in storage and sold throughout the year. “It’s a very steady demand there,” Philp said. “The fresh produce in California may not sustain two weekly services all year long.”
In addition to providing transportation services for Railex, UP offers its own refrigerated services — both carload and intermodal.
Five years ago, UP invested in thousands of new reefer boxcars. It has the rail industry’s largest fleet of refrigerated equipment. With the decline in rail cargo over the past year, Philp said reefer business has been a bright spot. In fact, during a conference call with Wall Street analysts, the sector got a special mention.
“Food and refrigerated products were the bright spots with our produce rail express leading the way with a 50 percent volume increase resulting from our new California unit train start,” said Jack Koraleski, UP’s executive vice president for sales and marketing.
“Reefer traffic is holding up really well,” he said. “And we’re one of the few groups to meet our mark.”
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