Union Pacific has shut down its cross-country reefer train service that provided West Coast agricultural producers with a direct connection to distributors in the Northeast. While UP has made numerous cuts in recent weeks in response to the economic slowdown brought on by the coronavirus, the shuttering of Cold Connect is among the most surprising.
The railroad’s Cold Connect service began in 2017 when it purchased RailEx, a logistics company founded in 2006. UP and CSX operated dedicated reefer trains from warehouses in Washington and California to a distribution center in Rotterdam, N.Y. The dedicated service could move produce from field to market in about a week. Cold Connect employees were informed Friday that warehouses would be permanently closed and most positions eliminated. A reduced staff will remain in place to ensure the final shipments make it to their destinations.
“This decision was not made lightly,” UP Spokesperson Tim McMahan said. “Since acquiring the Railex assets in 2017, employees diligently worked to grow volumes and create a platform for the future; however, with COVID-19 impacting volume and truck prices, it is no longer sustainable to continue operations.”
While UP has changed many facets of its business since implementing Precision Scheduled Railroading in 2018, the move to cut the dedicated reefer service was surprising. In fact, even as late as last year, UP was purchasing new equipment for the Cold Connect service and actively marketing it.