Today shippers of perishables are considering a wide host of shipping options in their efforts to cut costs for this product line where margins are tight and shrink can be high.

Just like shippers of other products, perishables shippers are jumping onboard intermodal rail as more and more transportation companies, particularly third party logistics operators (3PLs) add this option to their offerings.

Railex LLC, a refrigerated rail service and 3PL provider, transports fruits, vegetables and other temperature sensitive cargo services in some markets in California, the Northeast, Northwest, Southeast, and Midwest. The company operates in partnership with Union Pacific Railroad (UP) and CSX. In 2006 Railex launched service between Wallula, WA and Schenectady, NY, followed in 2008 by service between Delano, CA, and also Schenectady.

Fifty-two weeks a year, four roundtrips weekly, Railex transports refrigerated unit trains loaded with perishables on a 3,000 mile cross country journey. Empty rail cars roll into Railex’s 1,500-foot refrigerated warehouse in Wallula. A two-and-one half mile long loop track sits on 185 acres adjoining the Columbia River.

The Railex distribution platform utilizes a hybrid system of coast-to-coast expedited rail, consolidation/deconsolidation centers, and short-haul trucks to deliver goods into the hands of consumers quickly, efficiently, and cost-effectively. Key to its service is its unit trains of 55 large “plate F” refrigerated cars and regularly scheduled departures and arrival on a five-day service schedule. The company’s system is based on palletized cargo, which is loaded and unloaded indoors in temperature controlled docks that preserve a cold chain for the cargo. It also provides warehousing and can handle less-than-truckload (LTL) shipments.

In June 2014, Railex opened a $106 million, 50,000-square-foot cold-storage warehouse-distribution center in South Jacksonville, FL, with service from the West Coast. A facility near Chicago was added in the summer.

In addition, Railex proposes to buy an 18-acre trace of undeveloped rail-spur property adjacent to the Florida East Coast Railway marshaling yard and build a 225,000-square-foot multimodal center to warehouse and distribute refrigerated freight. It will be served by spur rail and support yard rail to handle 40-85 car unit trains within a 24-hour period. The facility will be the company’s fourth logistics center, joining those in Delano, CA; Wallula, WA; and Schenectady, NY.

Rail Issues

The Pacific Northwest, in particular, is known for its cornucopia of perishables from frozen vegetables, apples, pears, potatoes, onions, French fries, frozen and fresh carrots, corn, wine, beer, juice concentrate, and a cross section of fish. But the recent demise of the Cold Train is a good example of the problems and issues transportation providers can face in providing rail service for perishables.

In August, Cold Train closed its express service because restrictions in the BNSF Railway schedule changed delivery guarantees from three days to six days. Cold Train had operated out of Washington’s Port of Quincy as a dedicated rail service on the Burlington Northern-Santa Fe (BNSF) main line to Chicago,

“BNSF’s business decision to direct its resources away from Cold Train resulted in millions of dollars in operating losses and millions of dollars in capital investment losses, both of which are simply unsustainable,” Cold Train reported in a press release.

Cold Train had offered a unique service to perishable shippers who faced increasing issues with trucking services. But rising coal and oil train shipments forced the closure of the express rail service.

The issue is outlined in a study entitled Heavy Traffic Ahead: Rail Impacts of Powder River Basin Coal to Asia, prepared by Whiteside & Associates and G. W. Fauth & Associates for the Western Organization of Resource Councils, a Montana-based agriculture and conservation group. That study outlines how coal transport could exceed 75 million tons per year by 2017 and 170 million tons per year by 2022 to the proposed terminals in the Pacific Northwest. For comparison, trains unloaded about 80 million tons of freight in Oregon and Washington in 2010, stated a June 30, 2012 article in The Oregonian. The tremendous increase in rail transport will require additional overpasses, underpasses and other upgrades, costs which taxpayers have typically had to pay.

Transportation experts also found that increased rail traffic will affect grain producers that need access to rail space. The producers, the report shows, will face increased competition, potentially delaying shipments and increasing costs.

Trucking Issues

Trucking has historically been the primary mode for transporting perishables. But this mode is not without its issues. The biggest is driver shortages. The American Trucking Association’s Chief Economist Bob Costello recently revealed at ATA’s annual meeting that while freight volumes in the trucking industry continue to grow, the looming driver shortage could hold back industry growth.

“Industry revenue and average revenue per mile are increasing nicely as capacity remains constrained,” Costello said. “However, the industry is having a difficult time adding trucks due to the driver shortage.” He, in fact, was reported as saying that the shortage was “as bad as ever and is expected to get worse in the near term.”

ATA estimates a 30,000 truck driver shortage in the United States today. Factors contributing to the shortage include regulations, relatively low pay, and the fact that fewer young people are interested in getting into the profession. ATA reports that 90 percent of carriers say they cannot find enough drivers who meet US Department of Transportation (DOT) criteria.

The issue is further escalated because of many rules, regulations that the government has in place.

To provide better service, shippers and perishables transportation providers are implementing best practices. These require the trucker to be more attentive in performance and cold chain management.

Best practices include maintaining proper trailer temperatures, reefer settings, proper use of RFID temperature tags in shipments to retailer distribution centers, cross docking, and driver records regarding fleet times and logged hours.

Shippers like Wal-Mart are big on cross docking. Wal-Mart has found that cross docking makes its distribution process more efficient. Here perishables are directly picked up by the supplier, sorted out and directly shipped to the customer. The system shifts the focus from “supply chain” to “demand chain”, which means that rather than having the retailer push products on the consumers, consumers dictate demand.

Best practices are particularly important for maintaining trailer temperatures, especially since refrigerated products can warm during transit.

For example, table grapes and stone fruit transported at 31°F from California to Quebec rose 2.2 °F (front of the trailer) to 1.8 °F (middle of trailer) to 1.4 °F (back of trailer) over the course of 3 to 5 days. Temperatures also varied depending upon where inside the trailer the product was stacked.

“That which was carried on the floor was the warmest and gained anywhere from 1.1 to 4.1°F,” says Jim Thompson, emeritus extension professor, UC-Davis and president of Post Harvest Engineering LLC, who has studied the issue extensively.

He also found that during spring or late fall, outside temperatures and carrying temperatures were not much different. But in the winter, heat must be provided for chilled products to prevent chilling and freezing. If temperatures rise in the trailer during summer months, decay and ripening will occur.

More critical is the point at which the trailer must be opened and unloaded. If warehousing shipping and destination points are sealed and have refrigerated temperature controlled loading docks, there should be little variation in temperature conditions. The only exception is an open dock that is open to the outside.

In addition, most customers require that perishables be pre-cooled before the trailer is backed into a dock door.

“Once a trucker is ready to back into a dock, he should turn the reefer off, open the doors, and load or unload the shipment as quickly as possible without the reefer unit running,” says Ron E. Hall, director of Operations Technology for C.R. England - Global Transportation. “When the job is complete, back away from the dock, close the doors and start the reefer back up.”

Proper loading into well maintained equipment will also minimize warming. Pallet loads need to be unitized, and, in loading, an air space kept around the load. Also important is how the trailer is to be loaded.

There’s also the misinformed idea that having the reefer unit run while the trailer doors are open helps maintain the temperature of the product. “This is not the case,” Thompson says. In fact, this allows for the potential to draw in warm moist air and drive the dry, cold air out the back of the doors, which could damage product and cause the refrigeration unit to go into defrost mode too quickly.

Another potential hazard is an iced up cooling coil, the result of a closed reefer that runs for hours once loading is complete and the doors are closed. This reduces its cooling effect and puts cargo in danger until the unit completes a defrost cycle.

To help monitor temperature management, some trucking companies are increasingly employing transit data loggers or telematics. These also track and time their drivers.

Sioux Falls, SD-headquartered K&J Trucking uses a system called Blue Tree Temperature Management by Blue Tree Systems. One component of the system is when the trailer doors are open, the system automatically shuts the reefer unit off. This helps save substantially on fuel costs and manage equipment.

Increased Role of 3PLs

Scores of reasons point to why transportation is still the weakest link in managing the cold chain. For one, the low cost of entry into the transportation industry is enabling marginal players to compete.

Maria Wittmeyer, VP transportation, for Milford, DE-based Burris Logistics, has also found that 3PLs and brokers have a tendency to under price shipments. “This, in turn, forces established and reputable carriers to refuse to carry product,” she says.

3PLs and cold storage providers are increasingly playing an important role in today’s challenging cold supply chain. Alliance Shippers Inc. of Englewood Cliffs, NJ, for example, offers worldwide transportation and logistics services via rail, highway, air and waterborne carriage, all managed by the company’s Perfect Shipment® program, a process for providing on-time delivery for customers’ shipments. Under the program, every shipment is tracked automatically by a proprietary, state-of-the-art system. Ten distinct checkpoints ensure on-time pickup and delivery. The company’s web page is updated monthly for current actual performance.

Today, Alliance Shippers is the nation’s largest mover of refrigerated intermodal shipments. Alliance attributes this to a number of factors including its AA temperature-control fleet of more than 1,800+ 53’ technologically advanced CARB-compliant refrigerated trailers and the fact that all refrigerated intermodal shipments move on priority transit schedules on the nation’s Class I railroads.