Perishables Return to Rail
New regulations may spell opportunity for intermodal transportation
As the fresh produce supply chain grapples with the latest food safety rules, transportation mandates, and driver demographics, shippers should take a fresh look at the availability and cost performance of intermodal (truck and rail) delivery.
By definition, perishables deteriorate over time or if exposed to extreme temperatures (hot or cold), humidity, or other degrading environmental conditions. Proper handling, storage, and temperature control throughout transit is essential.
For many years, the long haul (over 1,500 miles) temperature-controlled market has been served predominantly by small trucking companies (e.g., less than five trucks) with a minimal share held by rail. The U.S. Department of Agriculture (USDA) estimates that boxcars handle 5 percent and intermodal only 1 to 2 percent of shipments. This extremely fragmented market is at a point of inflection, with the potential to grow significantly.
Intermodal is a substitute for traditional truckload movement. Like trucks, intermodal is loaded at the source and delivered to destination without any intermediate rehandling. Unlike truckload, intermodal does not have a single transportation provider performing door-to-door service. It relies on railroad carriers for the underlying long-haul line movement in combination with local pickup and delivery (drayage) at the origin and destination rail terminal locations. Intermodal does, however, require an integrator to put all the pieces together to provide truck-like service.
Railroads and Produce
Refrigerated transportation and the railroad industry grew together. As urban populations increased, so did the distance between food production and consumers. Refrigerated cars were in use as early as the 1840s, but only during the winter months.
By 1860 railroads began moving food stored in bins of ice taken from lakes and ponds, followed by chemically-manufactured ice, making it possible to ship perishables from West Coast producers to Midwest and East Coast markets. In the 1940s, Frigidaire (then part of General Motors) eliminated the dangers of toxic and flammable refrigerants with Freon, leading to refrigerated railcars.
The same technology that enabled mechanical refrigeration on boxcars also made it possible for trucks. By 1957 C.R. England was offering 72-hour coast-to-coast service by truck. The combination of the interstate highway system, truck competition, and deterioration of rail service all eroded the railroads’ share of business in the 1960s and 1970s.
The introduction of doublestack in the early 1980s was the most important intermodal innovation since containerization.