Readers should note that this story profiles a new company doing business as Green Express, which is not affiliated with Cold Train, an existing intermodal service run by Rail Logistics. We have also changed the title of the digital article from “Cold train transload” to “Cool train transload” to further eliminate any confusion.
A new venture developing a dedicated, high-speed rail service for moving refrigerated and dry food products between Florida and planned logistics parks near Chicago and Philadelphia could revolutionize perishable logistics for domestic and international shippers and underscores investors’ confidence in the Sunshine State as a viable alternative for imports and exports over other gateway ports on the East Coast.
Instead of shipping containers on vessels that may stop at several ports along the eastern seaboard, the service would book space with ocean carriers serving Central America that make Tampa, and possibly other Florida seaports, their first U.S. port of call, where they would be loaded onto non-stop unit trains and whisked directly north.
The collaborative effort between logistics providers, port authorities, railroads, growers, and food distributors is unique for its reliance on transload facilities for refrigerated rail boxcars, strategically located non-intermodal logistics hubs near production and consumption markets that can generate balanced, two-way trade volume, and express cold trains — all designed to reduce transit times and cost, and get fresher fruits and vegetables to store shelves.
It also represents the latest attempt by railroads, after massive investments in their intermodal franchises, to convert traditional highway freight to rail.
Orchestrating the logistics and transportation investments, as well as the operational arrangements, is a start-up sales and marketing company called Green Express, which essentially acts as a fourth-party logistics provider bringing together multiple partners looking for more efficient ways of transporting perishables primarily from Central America and Florida to the Midwest and from the Midwest to grocers in Florida and overseas.
“We’re taking that eastern sailing away and diverting it to Tampa, putting it on a train that is price competitive and bringing it to a local retailer about five days sooner at a cost that is less than trucking,” Nick Pacitti, vice president of business development for Green Express, said.
Growers and processors will be able to directly purchase transportation from Green Express, which will contract capacity with ocean, train and highway carriers to haul their fruits, vegetables and other products.
The other driving force behind the venture is Providence Logistics, a developer of rail-served inland logistics parks founded in 2010 by Chris McGrath and Joe Mikes, both former executives at First Industrial Realty Trust. Green Express’ ownership group includes the Providence owners and Pacitti, who is also a partner at Sterling Solutions, a Memphis, Tenn.-based boutique supply chain management consulting firm with expertise in cold-chain management and food safety, according to participants.
In mid-August, Green Express signed a letter of intent to build an on-dock transload facility at the Port of Tampa alongside a new rail spur that connects to tracks owned by CSX Transportation, a Class I railroad that will operate the Green Express service.
The combined investment by the port — for tracks and utilities — and Green Express is about $15 million, Raul Alfonso, chief commercial officer for the Tampa Port Authority, said. Construction of the warehouse is expected to begin in October and be completed in 12 months.
Containers will be lifted from vessels by large cranes, placed on yard tractors and shuttled several hundred feet to the center, where they will be deconsolidated and reloaded into refrigerated boxcars, or trucks serving the local Florida market. The contents of 3.5 containers can fit in one boxcar, Pacitti said.
The economies of scale are even greater than with container transloading, a common practice by which goods from three 40-foot ocean boxes are transferred near ports into two 53-foot domestic intermodal containers to minimize transport costs.
Project officials say CSX will deliver the reefer cars in about 56 hours to an 800-acre inland port in La Porte, Ind., where Green Express plans to build a transload and cross-dock facility.
The dual-rail served logistics hub is being developed by Providence Logistics within Kingsbury, an under-utilized, mostly greenfield industrial park with space for bulk storage, petro-chemical handling, refrigerated warehousing and other uses. Providence broke ground on phase-one improvements in September 2012 and is spending tens of millions of dollars for more than 1.5 miles of track to connect to the CSX mainline, new roads and other work, Mikes said.
CSX has designated the park as a Select Site that can rapidly take advantage of freight rail service based on its topography, infrastructure, and other significant characteristics. Under the Select Site program, introduced in January 2012, CSX prequalifies development-ready sites near its network and markets them to manufacturers and other shippers seeking reliable access to freight rail. The railroad simplifies the selection process and reduces the risk for shippers by screening the sites to ensure they have necessary environmental reviews, zoning and entitlement, permits, utility availability, rail layouts and proximity to highways.
Inland Logistics Port Kingsbury is about 45 miles southeast of Chicago, but also within easy reach of Cleveland, Columbus, and Indianapolis. There are about 50 million consumers within a 200-mile radius of the site. The former World War II arsenal is also served by the Chicago South Shore and South Bend Railroad, a short-line carrier that can provide switching and transfer services to Chicago for connection to western railroads. The park has more than four miles of rail and 11 miles of roadways within it.
Kingsbury is now CSX’s upper Midwest hub for manifest (mixed car), bulk and transload cargoes.
Beginning in November, CSX will run two dedicated express cold trains per week in each direction.
Iowa Pacific Holdings, which owns nine short-line railroads in the United States, will contribute the refrigerated boxcars for the service.
Pacitti said Green Express is in final negotiations for space to build the customized facility in Indiana, which will have intermodal lift capability on one side and handle refrigerated boxcars on the other. Trains will pull alongside the cross-dock to unload, where the contents of the boxcars will be quickly transferred to refrigerated trailers for last-mile delivery by motor carrier.
The facility is expected to be completed about six months after groundbreaking.
At the outset, Green Express will transport refrigerated containers and trailers that don’t need to be transloaded. The trains will have capacity for more than 100 containers. The company hopes to load the boxes for the return leg with beef, pork and other products for export from Tampa.
Green Express will contract with a short-line railroad to handle the lifts and the switching with CSX, Pacitti said.
A number of big food processors that import fruit from Latin America have expressed interest in committing between10 to 20 loads per week, or more, to lower transport costs, reduce spoilage and guarantee capacity because during certain harvest seasons it is difficult to find available trucks in Florida, Pacitti said. As demand grows, Green Express has the option of doubling weekly train frequency, he added.
Kingsbury’s potential as a food logistics hub with processors, distributors and service providers congregating, creating a critical mass of opportunity for service providers and labor, and sharing infrastructure and equipment is attractive to refrigerated warehouse and food companies, Pacitti said.
Those types of facilities would be adjacent to the Green Express cross-dock, enabling companies to keep forward inventory close to market, provide value-added services such as preparing store-ready fruit cups or making guacamole from avocados, and then ship locally.
“The train is a magnet for this food hub,” Pacitti said.
Next Gen Cold Train.
Shippers have moved perishables by train for many years and there are other examples of cold trains operating in the United States, but it is the first time that CSX has offered a dedicated, point-to-point, food train entirely on its own.
CSX several times a week runs a regular train with fresh orange juice from Florida to a distribution center in New Jersey for Tropicana, but it’s a niche operation for a single customer.
Union Pacific Railroad and CSX operate a joint dedicated produce unit train service between Wallula, Wash., and Albany, N.Y., with an interchange in Chicago, on behalf of Railex LLC, a division of Ampco Distribution Services which owns and operates both loading and unloading centers and manages handling and distribution at each end.
And a company called Rail Logistics has since 2010 offered an express, intermodal refrigerated container service called Cold Train six days per week between Quincy, Wash., and Chicago, on the BNSF Railway. As part of the door-to-door service, the company picks up and delivers product with 53-foot refrigerated containers. In Chicago, containers can be switched to other railroads for onward transport to the Gulf, Mid-Atlantic and Northeast via CSX and Norfolk Southern railroads. Transit from Washington usually takes four to five days to the Midwest and six to seven days to the East Coast, according to a company fact sheet.
Last year, the company added a service with same frequency between Portland, Ore., and Chicago. About 800 containers per month are currently being shipped from the Pacific Northwest, it says.
A distinguishing feature of the Green Express is that it involves a port and international cargo.
Providence is also developing a logistics park outside Chicago in Coal City, Ill., with local landowners and Union Pacific, which is reactivating an old line to make the site available for customers. It too will cater to manifest cargo, while also being able to handle intermodal shipments. The UP’s Pequot line feeds into its main line between Joliet and St. Louis, which UP would like to see more growth on, Peter Fleming, a partner at real estate brokerage firm Marquette Properties, said. The goal is to move cargo between South Texas, and even Mexico, and the Chicago metropolitan area. A map on Providence’s Website also shows Coal City as a hub for traffic to and from Southern California.
Construction on a $1.8 million lead track to the property is scheduled to begin early this fall. UP will reimburse the Village of Coal City for the infrastructure with operational revenue on a per car basis, Fleming added.
UP spokesman Mark Davis referred a call seeking details about the railroad’s involvement in the project to Marquette Properties.
The development of inland logistics ports that cater to non-intermodal rail cargo is a new step for the freight industry. In the past decade, railroads have built many modern terminals to exclusively transfer containers from trucks to rail as shipper demand for intermodal service grows along with improved rail service and trucking challenges, such as high fuel prices and a tight driver supply. Retailers require fast delivery for consumer merchandise because of its high value and the need to keep store shelves stocked to avoid lost sales. Operating dedicated intermodal trains is much more efficient than sorting cars by destination and type in a multi-purpose rail yard that also handles liquid tank, automobile, box, lumber, hopper and other cars. At the same time, developers opened massive logistics parks where railroads could deliver unit trains of containers, which could easily be delivered to co-located warehouses for storage, extra finishing and packaging, and delivery to local distribution centers and stores.
Providence is now trying the same approach for manifest cargo, building logistics parks for commodities that don’t fit neatly in a container but still require efficient processing and distribution in a central location. The logistics parks will enable overweight traffic to travel on their private roads and have status as foreign trade zones, which offer tax advantages to companies engaged in international trade.
“What we create in these locations is the hubs, or landing points, for the railroads where they can bring in full unit trains” of wind turbine blades, plastics, wood pellets and other commodities, Providence partner Mikes said. “We call it ‘rail estate.’ ”
Green Express has plans to expand the nodes in its network. The key to its business model is strategically locating logistics hubs where there is an abundance of consumers as well as food producers so that cargo flows are balanced, which often is a problem for agriculture shippers in the heartland today who can’t easily secure container equipment because imports tend to be directed to major metropolitan areas.
Next year Green Express will launch direct service between Tampa and an undisclosed facility near Philadelphia, adding a third leg to the company’s network. Mikes said unit trains moving between Philadelphia and Kingsbury could haul inbound produce from Europe arriving at the Port of Philadelphia as well as U.S. exports.
The service area for the Philadelphia facility will include Baltimore-Washington; Harrisburg, Pa.; Cleveland; and New York-New Jersey, Pacitti said.
Central American growers will be attracted by being able to reach consumers in the Midwest, lower Northeast and Florida markets on an expedited basis, he said. And, he predicted, carriers will add ocean services to Tampa to connect with the Green Express.
The Tampa Port Authority’s Alfonso said exports of frozen meat and other products from the Midwest are not limited to Latin America because Tampa is served by carriers such as Mediterranean Shipping Co. and Zim that have global networks with interconnected services.
The business proposition for the Tampa-Green Express partnership is that the port is only about three days by water from Central America. When the produce arrives, shippers will be able to reach the huge central Florida market, which swells with 55 million tourists per year, and the Southeast by truck, and the Midwest by rail.
“That’s a great combination for food retailers, the major distributors that are looking to get fresher products to their shelves,” Alfonso said. “The food industry is managed by many brokers and freight forwarders. What a choice if I could use one efficient port to serve my customers.”
Tampa services will be a direct threat to the Port of Philadelphia, which is a major international gateway for food products. Philadelphia potentially could also lose market share if a U.S. government pilot program allowing blueberries and grapes from Peru and Uruguay to be directly imported into South Florida is made permanent, or expanded to other origins and commodities (see the September issue article “Fruit fight
,” p. 57-58). Under current rules, certain types of produce must be entered through northern ports where cold weather could kill any fruit flies that escape.
The logistics wholesaler eventually plans to provide similar service from Moore Haven, Fla., to Kingsbury and Philadelphia, Pacitti said.
Lykes Bros., Inc., one of the largest private landowners in the United States with giant ranching and citrus holdings, and vertically integrated farming conglomerate A. Duda & Sons, Inc. are developing a 4,700-acre master planned international logistics center in Moore Haven, located less than two hours north of Miami in the center of southern Florida. It is within easy reach of most ports and consumers in Florida, including the metro areas of Tampa, Orlando and Naples.
Duda Farm Fresh Foods is a grower, packer, shipper, marketer, importer and exporter of fresh fruits and vegetables, and fresh-cut vegetables. Most of its products are sold under the Dandy brand.
Zoned for 21 million square feet of manufacturing and distribution facilities, the Americas Gateway Logistics Center is designed to support domestic producers and trade with the Latin America, Asia and Europe. A 300-acre perishables and food grade transload park — food campus — is expected to be part of first-phase development.
Pacitti said Green Express plans to link up with CSX about 50 miles north of Moore Haven by using a short-line railroad and track operated by U.S. Sugar.
“It’s really about filling empties,” Mark Morton, president of Americas Gateway Logistics Center, said. “And it allows the Midwest to connect to the southern half of Florida and use it as a freight forwarding and receiving platform to Latin America and beyond.”
Transloading also keeps trucks and containers in the local market, while higher capacity boxcars and rail are used for long-haul transport.
Moore Haven’s advantage for growers is that they can use multiple ports — Tampa, Manatee, Everglades, Miami, Palm Beach, Miami International Airport and Southwest Florida International Airport — and ensure a competitive transport price for international shipments, Morton said. Most ports with on-dock rail are transferring containers to trains and don’t have room to transload perishables into boxcars, Morton said.
The Americas Gateway Logistics Center will also have rail service up the east coast of Florida via the Florida East Coast Railway, which connects to CSX’s network in Jacksonville.
While the Green Express service from Tampa is mostly geared toward international traffic, supplemented by some surrounding growers, Americas Gateway is more of a logistics hub for Florida growers, which also has access to the other four ports, Morton explained.
Project officials tout the center’s location away from congested coastal residential and tourist areas while still having easy access to major highways. Most of the infrastructure, including rail frontage, sewer and utilities, already exists or can be brought on line quickly, they say. A truck stop with a compressed natural gas fueling station as well as diesel pumps is also planned for the facility.
Morton said negotiations with Green Express should be completed by the end of the year and the transload facility should be ready for operation by the end of 2014.
The continued interest in Florida as a logistics platform for distributing imported goods to consumption centers in the Northeast and Midwest runs counter to conventional wisdom that the state, especially South Florida, is too far from key inland markets and that shippers will prefer to use ports closer to the end destination. Critics also say that the Port of Miami is too narrow and small to handle much more than 1 million TEUs per year.
But Port Miami and the Florida East Coast Railway (FEC), in particular, along with Port Everglades in Fort Lauderdale are investing heavily to position South Florida as a prime catch point for mega-sized cargo vessels plying trade lanes from Asia that will be able to reach the East Coast in 2015 when the Panama Canal expansion is completed.
Port Miami is in the process of deepening its channel to 50 feet from 42 feet to accommodate super post-Panamax vessels and building a downtown tunnel bypass, on top of previous installations of new long-reach, ship-to-shore cranes.
FEC is building an on-dock rail facility at Port Miami and rehabilitating an abandoned spur connecting to its main north-south line. FEC affiliates are developing a major rail-served logistics park a few miles away next to Miami International Airport and FEC’s Hialeah rail yard where ocean imports can be transferred to larger domestic containers, stored or reconfigured for later distribution. Last year, the railroad also opened a new intermodal facility in Cocoa Beach.
Everglades is seeking congressional authorization to deepen its main channel up to 50 feet and is partnering with FEC to build an intermodal container transfer facility on port property to build trains with a mix of international and domestic containers.
The railroads, ports and industrial developers reason South Florida will be attractive to container lines as a gateway because they can unload a lot of cargo at one stop for the growing Florida market — permanent, tourist and seasonal — as well as the Southeast and Ohio Valley and get it north in the same time, or less, as using other ports along the East Coast.
Morton said Americas Gateway Logistics Center differs from FEC’s South Florida Logistics Center because the latter is primarily being designed for intermodal trains, plus its central location allows shippers to use one distribution site to reach both sides and the middle of the state instead of having facilities in three markets.