Union Pacific Corp. on May 8 announced plans to immediately close Cold Connect, which moves refrigerated products by rail from truck-to-train loading centers in Wallula, Wash., and Delano, Calif., to the railroad’s warehouse in Rotterdam, N.Y.
The closure — attributed to COVID-19 impacts — affects the Northwest onion industry, particularly shippers in southeast Washington and northeast Oregon. The Wallula facility also received a few onion shipments from the southwest Idaho-southeast Oregon growing region.
The onion industry is dealing with low prices and volumes, largely due to the shutdown of restaurants and other foodservice clients amid coronavirus concerns.
Union Pacific on May 8 notified employees that Cold Connect “will permanently close, and most Cold Connect-related positions have been eliminated,” the company said in a statement. The railroad said it would stop accepting inbound orders after May 8, but “our intention is to deliver on all product in transit until it meets its final destination. A reduced staff will temporarily remain in position to execute these final commitments.”
Union Pacific spokesman Tim McMahan declined to comment.
The company’s statement said the decision “was not made lightly. 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.”
Cold Connect is a Loup Logistics service. Loup was formed through a merger of four UP subsidiaries.
“We send onions back to the Northeast,” said Jason Walker, general manager at Bybee Produce in Prosser, Wash. “That was a really good option for transportation. It’s going to have a negative impact on our industry with that closing.”
He declined to say how much volume Bybee Produce shipped via the rail facility in Wallula. “I would say we used Cold Connect on a weekly basis, and now that is all going to have to get shifted to other transportation.”
Most of Bybee’s onion shipments likely will switch to truck, since the company does not have rail-loading access at its own facility or nearby, Walker said.
Grant Kitamura, a partner in Baker & Murakami Produce in Ontario, Ore., near the Idaho border, said few local onion shipments went to Wallula because it was too expensive by the time they were trucked 200-plus miles to the northwest and then sent east by train. Cold Connect handled a few southwest Idaho-southeast Oregon shipments, mainly at customers’ request.
The facility gave a freight advantage to Washington and northeast Oregon onion shippers, “and now we are back on a more even playing field,” Kitamura said.
But since onion shippers in southeast Washington and northeast Oregon will use more trucks in the absence of Cold Connect rail service, “that could put pressure on truck supplies — a negative for both regions,” he said. “It all remains to be seen.”
Kitamura is president of Malheur County Development Corp., which is overseeing plans to build a Treasure Valley Reload Center. The facility would be used to ship onions and other commodities east via Union Pacific.
He said the TVRC could open as soon as the fall of 2021. The opening schedule is subject to when meetings can be scheduled, additional approvals from Oregon transportation officials, and feasibility-related negotiations with Union Pacific, a third-party operating company and Treasure Valley Onion Shippers LLC, which includes 15 onion shippers.
“While we don’t like to see any economic loss to our agricultural partners, this does create a tremendous opportunity for the Treasure Valley Reload facility,” said Greg Smith, the development corporation’s officer to the board.
For example, he said its service would open additional markets in the South, the Midwest and on the East Coast.