Three years in making, intermodal service for fresh produce gets rolling this spring

After nearly three years of effort and a fair amount of frustration, three intermodal veterans are coming to market with a rail intermodal service to support the long-haul movement of fresh produce.

Dubbed "Tiger Cool Express LLC," the company will launch in early spring of 2014 with funding from Tiger Infrastructure Partners, a middle-market private equity concern. Tom Finkbiner, a long-time intermodal executive, will serve as CEO. Theodore Prince, a veteran carrier executive and consultant, will be COO. Tom Shurstad, who was president of intermodal service provider Pacer International among other high-level posts, will serve as chief commercial officer.

In late 2010, the three created a transport initiative code-named "New Cool Venture" that would use a mix of intermodal containers and boxcars to move perishable produce, depending on product type. Higher-density produce items like carrots and grapefruit with generally longer shelf lives would move in boxcars, which have 7,700 cubic feet of capacity and carry 186,000 pounds of cargo, roughly equal to four truckload trailers. Lighter-density items with shorter shelf lives, like lettuce and grapes, would move in faster, double-stack containers.

The program would follow the growing seasons in various geographies. For example, when the season ends in California, the service would support agricultural regions in Florida, Mexico, and elsewhere. In separate interviews in January, Finkbiner and Prince said the service would play to intermodal's strengths, namely supporting a seasonal business where shipments move over long-haul, irregular routes. The venture would offer line-haul costs as much as 20 percent cheaper than truck transport and with lower fuel surcharges than truckers would impose.

In the January interviews, Prince and Finkbiner said the service had the potential to convert tens of thousands of truckloads of produce—virtually all of which are handled by small, independent truckers—to the rails. Prince said at the time that there are 30,000 truck trailers of perishables moving off the West Coast and traveling up to 2,000 miles, longer distances ideally suited for intermodal transport. The executives said the program would give shippers and retailers a viable option to over-the-road transport, which has a near-monopoly over the long-haul produce market; intermodal, by contrast, has an estimated 2 percent share, according to Finkbiner.

In a statement yesterday, Finkbiner said "there has been increased interest—but limited alternatives—in transcontinental intermodal transport of fresh produce that is quick, safe, and environmentally sustainable."

Getting the program to this point was not easy. The venture lacked the funding needed to build an extensive infrastructure and procure specialized equipment. Another obstacle was the reluctance of rail intermodal executives, who seemed comfortable operating in the traditional dry van space and were leery of expanding into the more operationally risky perishables category in a major way. A third was overcoming the concerns of mega-retailers that have snatched buying power for produce away from traditional wholesalers; Finkbiner said the retailers were worried about service consistency and wanted to see that the infrastructure was in place before making any large volume commitments.

As a result, the executives have spent much of the past two years in conversation mode. But as Prince noted today in an e-mail, "the big change is that we are funded, are hiring people [and] obtaining equipment; and have a start date. It's now real."