ExpressTrak, a Detroit, Michigan, freight-marketing company, and Amtrak, the national rail passenger service, recently signed a long-term agreement to move perishables cross country by rail. A press conference announcing the 15-year agreement was held at the annual meeting of the National Industrial Transportation League on November 15 in San Antonio, Texas.
The agreement was reached after a year-long pilot program testing the movement of produce in Amtrak trains. About 350 refrigerated boxcars are to be rebuilt and placed into service for the expanded operation. The first of the 57-ft refrigerated cars will be put into service in April 2000, Amtrak officials said. The last car will be delivered by the fall of 2001.
"We are pleased to enter the refrigerated produce market with ExpressTrak as our business partner," said George Warrington, Amtrak's president and CEO. "This is another step in Amtrak's strategic business plan to grow our mail and express freight revenues."
ExpressTrak specializes in moving produce and other temperature-sensitive commodities. Because Amtrak can move these products across the country at passenger train speeds up to 90 mph on tight, consistent schedules, the service ensures product freshness for buyers in distant markets, Amtrak officials said.
"Amtrak and ExpressTrak can offer time-competitive delivery of temperature-sensitive commodities that need to be shipped cross country," said Ed Ellis, vice-president of mail and express for Amtrak. "Amtrak is working with companies in the refrigerated food business to expand the variety of products carried by rail."
Amtrak is best known as a passenger service. In recent years, however, it has focused on increasing mail and express operations, representing a fast-growing segment of the company's business. Mail and express generated $98 million in revenue in fiscal year 1999 (October 1, 1998 to September 30, 1999). The express portion of Amtrak (the expedited transportation of time-sensitive shipments) grew by 93 percent in fiscal year 1999.
An important factor in the expansion of Amtrak's mail and express business was a favorable ruling by the Surface Transportation Board in May 1998 on Amtrak's petition for the right to continue handling carload and trailerload express shipments along with scheduled passenger trains. That ruling helped clarify important relationships with Amtrak's railroad partners and strengthened its position with mail and express customers.
"Shippers like the product we have and want to see more," Ellis said. "This past year our business grew rapidly as additional equipment came on line. We couldn't have achieved this were it not for the full cooperation of the nation's freight railroads. We have formed strategic alliances with the Burlington Northern Santa Fe and the Norfolk Southern, and with other leading freight service providers including Mark VII and Swift Transportation." (See Refrigerated Transporter, November 1999, for details of Mark VII produce service.)
Amtrak operates a variety of equipment for the mail and express service. The corporation's board of directors recently approved acquisition of 200 additional RoadRailers and 100 new express boxcars. This equipment will be added to the current fleet of 456 RoadRailers and 250 boxcars. In addition, more than 200 privately owned RoadRailers operate in Amtrak trains.
The produce operation will focus on shipments from California to the Midwest and Northeast, and from California to Florida. Market demand in these traffic lanes exists, based on ExpressTrak's experience in working with the Amtrak express operation for the past 15 months, said Kevin McKinney, vice-president of marketing and administration for ExpressTrak.
"GPS (Global Positioning System) will provide instant tracking and monitoring, and send data on the mechanical status of the rail equipment," McKinney said. "We will ship perishables throughout the US and in Canada."
Though Amtrak only recently began hauling perishables, it does not see itself as competing with the freight railroads. "We want to establish our own market," Ellis said. "While we're renovating all these refrigerated boxcars, the other railroads are exiting this market. From the freight point of view, we are working with the other railroads to expand - for example, into Chicago where freight railroads can help us."
