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C O V E R S T O R Y All Aboard the Road-to-Rail Conversion North America's rail carriers offer a compelling value proposition for the food supply chain. B y L A R A L . S O W I N S K I T he trend to convert truck freight to rail shows no signs of slowing down, with rising fuel prices, capacity concerns and sustainability initiatives putting more pressure on companies to look for alternative transportation options. While trains played a significant role in the domestic food supply chain decades ago, especially for refrigerated shipments, that business segment withered during the 1970's and 80's when railroads ceded to the trucking sector. However, there are dramatic changes underway. Competing against OTR "We're seeing a bit of a renaissance," observes Dave Howland, vice president for land transport services at APL Logistics. "The rail carriers are realizing that if they go back to the concept of running unit train operations, they can compete very nicely with the truckload world and in some cases even beat them." He offers an example: "If you can load a unit train out of California and the next stop is Chicago, with that service the rail carriers are now 'highway competitive.'" And because it's a much 18 AUGUST 2013 • FOOD LOGISTICS MAY 2013 • FOOD LOGISTICS faster service, the railroads are getting a much higher utilization on those rail cars, he points out. "Instead of the usual four- to six-week turn on their assets, now they're looking at a two-week turnaround on that L.A. to Chicago route," and it's forcing the railroads to view their business model differently, says Howland. The result is that railroads are recapturing some of their lost market share, which in turn supports their willingness to make capital investments in new equipment, including refrigerated cars, making rail even more attractive to food shippers. Meanwhile, it's not just the railroads that are investing in new refrigerated services and equipment, but other www.foodlogistics.com www.foodlogistics.com