Date: Mar 03, 2014
March 2014-Special Transportation Issue

If all goes as expected over the next couple of months, by mid-May a new unit train will be operating once a week between Selma, CA, in the heart of the San Joaquin Valley and Wilmington, IL, which is outside Chicago.

Jason Spafford, vice president of business development for McKay TransCold, the company that will operate the service, told WG&S in mid-February, “we’ve had a couple of delays because of the cold weather as might be expected, but we are still looking at early to mid-May as our launch date.”

McKay TransCold is headquartered in Edina, MN, and is a logistics company that includes trucks and trailer assets.  For the past three years it has been working closely with BNSF Railway in an effort to establish this refrigerated boxcar unit train between Illinois and California.  The facility in Selma has been completed and the one in Wilmington, IL, is entering its final construction phase, according to Spafford.

The concept of a single destination unit train has gained favor in recent years with several, different ones established between different points.  For the produce industry, Raillex Corp. runs several trains between both Washington state and California in the West, and its eastern hub in Rotterdam, N.Y.  McKay TransCold is poised to provide a similar service to the Midwest.

Spafford said within a relatively short time, the company expects to have two trains going in each direction each week, but initially “we will start out with a Wednesday evening departure from each end,” scheduled to arrive at its destination on Sunday evening allowing for Monday delivery to the ultimate delivery points.

What makes this effort a bit different than others, is that it was originally conceived as a result of the westbound freight.  Initially, the principals of the firm met with egg producers in the Midwest that were looking to help fill a void in egg production in California.  A California ballot proposition of several years ago has made it harder to be an egg producer in the state and some Midwest suppliers have created some marketing niches in the West.

Spafford said that original idea did give wings to the concept, but as the unit train concept has been developed and more potential users contacted, the egg connection is no longer the driving force.  “While the concept started with eggs and it did get the idea going, we think eggs will only represent about 10 percent” of the westbound haul.

Representatives of the organization, including Spafford, CEO Randy McKay and Director of Logistics Andrew McKay, have been out making calls and finding great interest.  For the westbound freight, Spafford said finished food goods, such as frozen pizza and other refrigerated products from Midwest manufacturers, will fill the trains.  These will be items unloaded in Selma and trucked to food warehouses, retail distribution centers and foodservice operations throughout California.  And in fact, he said commitments have already been taken for the vast majority of the available westbound space.

For the eastbound trip, McKay TransCold does expect the produce industry to be a major utilizer of the equipment, but not exclusively.  “We are also talking to other manufacturers such as producers of meats, cheeses and butter.”

At one point, some wine makers were interested, but their need for refrigerated transportation is very seasonal.  To the extent possible, McKay is trying to secure annual contracts with its users in an effort to offer the best rates and service possible and to determine the speed at which it needs to expand to a second weekly train.

Of course, the company knows the production of fruits and vegetables is highly seasonal, but still they also know that many, many shippers produce crops all year long and have need for transportation 52 weeks of the year.  “We’d like to get annual commitments in exchange for a consideration on price and capacity,” he said.

At capacity, each train will pull 50 cars, with each car representing about four truckloads of product.  “We know a shipper might change what he puts in the car throughout the year, but if someone could commit to one car per week for the year, that’s what we are looking for.”

He continued:” “We know we will have spot market pricing and capacity, but we don’t want to just be considered for overflow.”

While the capacity for the unit trains will be 50 cars for each run, Spafford said that initially “we expect to start with about a 30-car train and ramp up to 50 cars as needed.”

He expects that could take up to six months.  He said the cold storage capacity exists at each end for as many three trains a week moving in each direction.  But admittedly that volume will take time to build.

The trains will utilize BNSF Railway equipment.  “In the BNSF system there are 960 72-foot ‘super reefers’.  All of the refrigeration units have been refurbished,” Spafford said.

In addition, each car will be equipped with modern technology allowing for real-time temperature monitoring, and even minor adjustments and repairs will be able to be made remotely.

For the eastbound shipments, both Spafford and Andrew McKay have been calling on shippers and have found interest from producers of commodities such as carrots, citrus and stone fruit.  “We’ve been trying to get the pulse of what the grower-shippers needs are, as well as the needs of the retailers in the Midwest and then we will connect the dots.

Logistically, the westbound train will take off from Illinois on Wednesday and arrive in Selma on Sunday evening.  It will be offloaded over the next 18 hours with the product either shipped or put into the Selma cold storage facility.  By Monday afternoon, the cars will be ready to be reloaded for the eastbound shipment.  Over the next 48 hours, those cars will be loaded for Wednesday evening departure.  Of course, not every product can be loaded at the last minute, so the storage facility will accept product early and store it in cold storage free of charge until such time that it can be loaded in a boxcar.  “It will be a very well choreographed dance,” Spafford said.

Once the eastbound train arrives in Wilmington, IL, on Sunday night, it will be unloaded with the fresh product ready for delivery to final destination Monday morning.

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Tim Linden