Apr 28, 2011 12:07 PM

NFI goes onboard with rail transport of reefer
containers as fuel-saving intermodal solution

As fuel prices ratchet up—and with higher prices expected for the near future—one logistics company is finding success by turning to rail transport of refrigerated containers instead

Indeed, Ike Brown, vice-chairman of NFI and president of NFI Intermodal, calls rail transport of refrigerated containers “the next evolution in intermodal.” The results certainly support that claim.

Consider that NFI began with six refrigerated rail containers in mid-2010. By January 2011, the company had 50 containers in response to a dramatic increase in demand for volume capacity.

“Our business is increasing every month as we’ve hit a nerve in the transportation industry that recognizes the need to increase capacity of shipments while keeping the number of trucks on the road down,” said Brown. “In this economy, there is more demand for transport than equipment available.”

Brown said the idea to use refrigerated containers for food transportation came to him in the supermarket one day, as he saw how many new varieties of frozen foods were available.

In a year when supermarkets aggressively cut prices and battled with deflation, frozen food sales grew 3.1% to $40.5 billion for the 52 weeks ending January 23, 2010—more than four times the 0.7% rate of growth for total food sales, according to the Nielson Company. While most supermarkets have expanded their fresh fruits and vegetable selections, frozen food aisles have doubled. As a result, sales of frozen food entrees and side dishes have seen tremendous growth.

Refrigerated rail containers allow for efficient and speedy delivery of large volumes of perishables, including frozen or refrigerated products such as ice cream, pasta, and baked goods. They give companies like NFI a sensible alternative mode of transportation to over-the-road (OTR).

“NFI has always had the reputation of being a leader in product innovation within the logistics industry. We believe that based on industry indicators, the next big conversion to intermodal will be refrigerated foods needing temperature control at various levels,” said Brown.

The company’s state-of-the-art refrigerated containers keep products frozen up to minus 20 degrees F. These containers can be moved on any of the Class 1 railroads over any major US rail route. Each insured container can ship finished product or raw materials. Products are kept frozen by a refrigerated unit fueled by a 120-gallon fuel tank mounted on the front of the container.

Every container is monitored by NFI through an installed alarm device that provides inside and outside ambient temperature, fuel level, and global positioning, giving the firm full visibility during the entire length of haul. If an incident occurs, NFI has back-up services to make certain the product is kept safe.

NFI tested one of these containers before the fleet was put into general use. A major ice cream manufacturer contracted with the company to ship product from California to Indiana round-trip in seven days. The ice cream had to be maintained at –20° F while in transit. Ice cream is one of the most difficult products to handle due to the consistent temperature at which it must be kept and high susceptibility to spoilage.

The test was a resounding success. The ice cream was delivered on time and in pristine condition. It was achieved by using the BNSF expedited container train with three-day service in each direction. NFI used its own company trucks to complete the pickup and delivery in California while employing contracted drayage for delivery and pick-up between the Chicago BNSF ramp and the final consignee in Indiana. By using both company and contracted drayage, NFI could be certain all providers would be capable of moving the refrigerated unit correctly and on time. Since the fuel tanks on the unit held 120 gallons of fuel, there were no concerns about having to refuel en route.

Brown said the intermodal division of NFI experienced exponential growth between 2008 and 2009, before changes in regulatory environments in 2010 affected pricing. Now he foresees growth picking up again in 2011, with billions of dollars being spent federally and at the state level to improve networks, add more rail depots, and generally make rail transport a more competitive option than OTR.

NFI’s new refrigerated containers have been proven to successfully handle shipments of highly perishable product using what it sees as the most efficient, environmentally friendly method of transportation today—the railroad.

This increased emphasis on intermodal and sustainable initiatives fits well into NFI’s core values.

“Our corporate values include customer service, performance, and social responsibility, “said Brown. “The economic benefits of refrigerated rail containers are complemented by how they contribute to sustainability.”

By reducing the number of trucks on the road, intermodal transport lessens the company’s carbon footprint.

NFI is dedicated to a cleaner environment through the Environmental Protection Agency’s SmartWay Partner Transport program, a cooperative effort between the EPA and the freight industry to increase energy efficiency and reduce the impact on the environment.

“We’ve invested hundreds of millions of dollars in new equipment and are responsible to the motoring public to be on the forefront of the technology available to us to put a safe truck and driver on the road and to cut down on our emissions as much as possible,” said Brown.

NFI is a conglomeration of transportation-related companies dedicated to serving the supply chain logistics industry by offering dedicated truckload services, logistics, and warehousing across the United States and Canada. The company started in 1932 as National Hauling in Vineland NJ with one dump truck, and has grown to become a leader in third-party logistics. One of New Jersey’s largest private employers, NFI generates $900 million in gross annual revenue, employs more than 5,500 individuals, and maintains 2,000-plus tractors and 7,200 trailers.

The company’s success nationally and abroad as a trucking company often obscures its diversity and range of services.

“Some of our trucking clients are surprised to learn of the breadth and depth of our other services, and vice versa,” said Sid Brown, NFI’s chief executive officer and brother of Ike. “The excellence we bring to our transportation division extends across all aspects of the supply chain: distribution, warehousing, packaging, logistics, and real estate. NFI is a one-stop resource for integrated supply chain solutions.”