H.J. Heinz Rides The Potato Train
Rail offers reliable transmit times, less product damage.
H.J. Heinz Co. knows a bit about Americans' insatiable appetite for potato products and it helps feed this national appetite. Every month, the company ships over 90 million pounds of its Ore-Ida brand frozen potato products eastbound on temperature-controlled refrigerated railcars from each of two of its Pacific Northwest facilities in Nampa, ID and Ontario, OR.
The products arrive in one of four of Heinz DCs located in Atlanta; Massillon, OH; Allentown, PA; and Carthage, MO.
"We target 40 percent of our total manufacturing weight to ship by rail for the inherent cost benefits of rail over truck," notes John Pendel, senior manager of transportation for the Pittsburgh-based company. "We aim to stay cost-competitive and to do that we have to maintain a dependable reliable transportation pipeline."
Heinz leases 91 refrigerated boxcars from Owings Mills, MD-based Cryo-Trans Inc., which uses Union Pacific locomotives to move the transcontinental trains. The advantage of this program, says Pendel, is rail has steady and reliable transit times, delivering products with little or no damage.
Heinz maintains a high level of fill-rate standards for its customers. "We fill the pipeline with rail (our first choice) and then use truck to assure we provide the highest premium service levels to our customers."
The Cryo-Trans program gives Pendel the ability to control the Heinz fleet. Operating a private fleet is an advantage over not relying on system cars, he says.
"From a quality standpoint, having full visibility over location and railcar temperature helps us maintain our quality standards. We have the highest level of confidence possible to be sure our commodities are being handled according to our standards."
A Cryo-Trans employee, working on-site at the Heinz North America headquarters in Pittsburgh, constantly monitors and reports to Pendel the status of Heinz railcars in transit. Rail transportation fits into the Heinz corporate culture, which advocates maintaining a green philosophy. "Our KPIs now includes an indicator relative to choosing the best transportation mode with conservation and the environment in mind," notes Pendel.
The journey east takes from nine days to reach the closest DC in Carthage, to 11 days to arrive at the furthest DC in Allentown. Pendel admits the effort is ongoing to fill railcars to get better utilization, especially on the backhaul. Heinz is always on the lookout for inbound opportunities on its railcars heading west. -A.T.
Riding With Railex Opens New Opportunities
Onion grower gains customers-and control-with fledgling rail service.
When Jody Easterday receives a request from one of her customers on the East Coast, asking for next-day delivery of a load of onions, she can deliver even though her farms and her office are located in Washington State.
"As a West Coast shipper, we had never been able to do that for our customers on the East Coast," says Easterday, president of Easterday Onions in Pasco, WA.
This kind of business model would not be possible without the services of Railex USA of Riverhead, NY.
When Railex began operating, its services opened up new opportunities for Washington State growers, including Easterday Onions. "We are huge producers up here, but we didn't have good, quality transportation we could count on year-round," says Easterday.
When using conventional rail, she sometimes would order cars that never arrived and, in order not to be caught short, Easterday felt forced to order extra cars. "If they decided to send us all the cars we ordered, we'd be stuck with extra cars and we'd have to pay demurrage fees if we didn't use them."
The Railex model really shines in November and December, when truck capacity is very tight and very expensive, reports Easterday. "Even during these times, we are still able to maintain our consistent delivery schedules to our customers."
Today, a year after Railex began its run from Wallula, WA, to Rotterdam, NY, business operations are a lot more predictable for Easterday. One reason is Railex allows her to keep inventory in the Rotterdam facility. Holding inventory for her customers offers a huge benefit in customer service, as an increasing number of her accounts don't want to deal with that responsibility.
Most times, the onion shipments have not been completely sold when they leave Washington State and the Railex train is like a rolling warehouse from which inventory is sold during the journey or when it reaches the Rotterdam facility.
"Another benefit to this service is there is no break in the cold chain or in the controlled atmosphere of the train," notes Easterday. "When I used conventional cars, the product would often be loaded into an old, musty car for 19 days to 30 days. But Railex cars are specifically engineered for products such as ours and they do a great job of making sure the quality of the products is maintained through final destination."
As for savings, Easterday notes it's not really a question of saving money-but more an issue of what you are gaining by using Railex.
"I am gaining better customers, I have more control over my product, I don't have as many quality claims as I used to have and I am able to provide my customers with first-class services," she says. "We have slowly and surely increased our business as a result of using these services. I look forward to them growing into other geographic areas so we can further expand our business." -A.T.