Posts Tagged “BNSF”
Former Cold Train LLC executives have file an amended complaint for damages against Burlington Northern Sante Fe Railway (BNSF).
An original $41 million lawsuit was filed in April 2015 against BNSF by Cold Train’s former President/CEO Steve Lawson and Managing Member Mike Lerner. The amended complaint was filed November 20th in U.S. District Court, Spokane, WA. It details even more significant issues about BNSF actions, which allegedly caused Cold Train Express Intermodal Service’s failure.
In particular, the amended lawsuit states that BNSF engaged in unfair and deceptive trade practices and violated the Washington Consumer Protection Act by wrongfully requiring Lerner, Lawson, and Cold Train, LLC to agree to a 95 percent carriage requirement, which effectively prohibited Cold Train from using other rail carriers. BNSF allegedly refused to revise its wrongful 95 percent carriage requirement despite promises to the contrary, and by refusing to allow the Cold Train to ship more than five percent of its traffic on other railroads.
BNSF’s unfair and deceptive trade practices were conducted in the course of its railroad business and caused significant harm to Lerner, Lawson, and Cold Train, LLC
(The purveyor of this website has written off and on for decades about railroads hauling produce. More specifically, stories about how the rails often lacked an understanding of perishables transportation, as well as not making it a priority. If the following lawsuit has merit this could prove to be another example of the risks involved in transporting perishable fruits and vegetables by rail.)
A multi-million dollar federal lawsuit against BNSF Railway Co., blaming the railroad for the failure of the refrigerated rail service for fresh produce has been filed by Steven Lawson, former president and CEO of Cold Train, and Mike Lerner, former managing member of the company. Both claim they had to shut down their rail service for fresh produce because BNSF failed to meet its promise for 72-hour delivery times.
Seeking $1 million in damages, the case was filed in federal court in Spokane, WA recently.
The lawuit alleges that the 72-hour “on-time percentage” steadily dropped from 92% in August 2013 to 3% in April 2014 because BNSF was favoring oil and coal over fresh produce in its scheduling. This resulted in Cold Train losing most of its fresh produce business, including apples, onions, pears, potatoes, carrots and cherries, which was more than 70% of the company’s business, the complaint alleges.
“The shutdown of Cold Train was caused by a significant slowdown in BNSF’s service schedules on its northern corridor line beginning in the fall of 2013 because of increased rail congestion as a result of BNSF hauling larger volumes of oil and coal from the Northern Plains region,” according to the April 7 news release.
A spokeswoman for the railroad said as of April 8 BNSF had not been served with the complaint and therefore its officials could not comment on specific allegations.
“But any suggestion that BNSF would intentionally seek to cause harm to any customer runs completely contrary to how BNSF conducts business,” BNSF communications director Amy Casas said.
“BNSF did experience well documented service issues following unprecedented demand levels and historic winter weather events beginning late in 2013, but we worked to remedy those situations and regularly communicated with our customers throughout the period so that they could anticipate when service would improve and plan accordingly.”
Cold Train shipped approximately 300 containers a month in 2011, according to the release. By 2013 it was shipping 700 per month with a goal of 1,000 per month by the end of that year. BNSF required the Cold Train to acquire a minimum of 111 refrigerated containers.
“BNSF also required the Cold Train to ship a minimum of 95% of the Cold Train’s entire container movements with BNSF, effectively prohibiting the Cold Train from using other carriers,” according to the news release.
By May 2012, Cold Train had 175 containers in service with another 100 on order for delivery in January 2013. Cold Train continued to purchase and lease containers, and by September 2013, the company had over 400 refrigerated shipping containers in service.
“In March 2014, representatives of Cold Train and Federated Railways Inc. met with BNSF representatives in Fort Worth to discuss the Cold Train’s business and its future with BNSF. At the meeting, BNSF continued to encourage Cold Train and Federated to proceed with the sale. Immediately after the meeting, Federated provided Cold Train a $1.25 million capital infusion based solely on that meeting, and announced that it was acquiring Cold Train,” according to the news release.
Ultimately Federated withdrew its offer to buy Cold Train. Lerner and Lawson contend they had to “walk away with nothing” from a business that had been worth more than $30 million before April 2014.
In sort of a flashback to the ’70s it seems history is repeating itself as a lot of hoopla is taking place about the rail industry getting more serious about hauling fresh produce – and competing with trucks. In the short run it seems not to have worked out that well — at least for some.
The latest example is McKay TransCold of Minneapolis, which closed its doors November 1st, after launching a new refrigerated boxcar service last June. Known as Transcold Express, it had weekly runs between Selma, CA and Wilmington, IL. However, the company had problems with its cross dock operation in Wilmington, where it had spent monies on significant upgrades of the facility. Unable to find additional investors to continue operations, the company decided to call it quits.
Another short lived example of a foray into the rail perishables business is the Cold Train Express Intermodal service that suspended service last summer. Cold Train saw its on time service on BNSF’s Northern Corridor plummet from 90 percent in November 2013 to only 5% percent last April. Cold Train said the reason relates to soaring oil and coal shipments by rail. For example, the Northern Corridor of BNSF saw tank car shipments increase from 20,000 three years to over 400,000 this year. Unlike it’s southern routes, which has two sets of tracks, the northern route has only one set of rail tracks.
Meanwhile, Railex, which started a rail service a few years ago, seems to be doing better than anyone, with it’s coast-to-coast service. Another service, Tiger Cool Express LLC, also remains in business, but we hear little about it.
Produce is viewed by some in the rail industry as the last long-haul, $100 billion market that intermodal has yet to penetrate. Still, over 95 percent of fresh produce is delivered by truck in the U.S.. Rail officials are counting on trucks supplies tightening, with the driver shortage continuing to worsen and increasing government regulations on the trucking industry – which in theory is supposed to be deregulated.
Cold Train Express Intermodal Service suspended service this summer due to rail congestion, while two new refrigerated rail services were just getting started.
McKay TransCold based in Minneapolis began last June offering a refrigerated, dedicated boxcar unit train known as Transcold Express, which runs each week between Selma, CA and Wilmington, IL. Meanwhile, Tiger Cool Express LLC, Overland Park, KS launched intermodal services from multiple locations in southern California to destinations in the Midwest and East Coast in February. In a press release Cold Train reported that on-time deliveries for shipments on BNSF’s Northern Corridor fell from more than 90% in November to less than 5% in April due to surging more oil and coal shipments.
Meanwhile, the problems on BNSF’s northern lines reportedly has had little effect on the southern BNSF and Union Pacific rail routes.
Tiger Cool Express, reported rail shipments of oil from North Dakota on BNSF’s Northern Corridor have increased from 20,000 tank cars three years ago to more than 400,000 this year. And unlike major southern rail routes in the U.S., that northern route doesn’t have two different tracks.
Produce is viewed by some in the rail industry as the last long-haul, $100 billion market that intermodal has yet to penetrate. Still, over 95 percent of fresh produce is delivered by truck in the U.S.. Rail officials are counting on trucks supplies tightening, with the driver shortage continue to worsen.
Cold Train Express Intermodal Service on August 7th announced it would be suspending service at its location at the Port of Quincy, WA. Cold Train, operated by Rail Logistics of Overland Park, KS, developed a transportation program model which allowed fresh producers in the Pacific Northwest to take advantage of refrigerated rail service that moved commodities to Chicago, IL, and points beyond in a timely and efficient manner.
The Northwest is expecting large crops of pears and apples. Shippers are concerned about availability of trucks and need all the transportation options available.
It is up in the air for the time being seeing what service Cold Train may be able to take to restore in the future. One other rail option continues to be Railex service to move fruit.
The Cold Train announcement follows a number of scheduling issues on BNSF Railway’s Northern Corridor line that have been occurring with BNSF beginning late last fall because of increased rail congestion. This has been caused by a surge of oil and coal shipments on the Northern Corridor line,” Cold Train said in a statement. “In fact, from November of 2013 to April of 2014, BNSF’s On-Time Percentage dramatically dropped from an average of over 90 percent to less than 5 percent.”
This past April, BSNF Railway announced an initial reduction in intermodal service out of Washington to one train a day with transit times being two to three days slower than prior timetables.
“As a result of the scheduling change in April, the rail transit time nearly doubled,” Cold Train stated. “Unfortunately, this caused Cold Train’s costs of equipment, fuel and other costs to double, and caused many customers — especially fresh produce shippers — to look for other transportation service options.
In fact, because of BNSF’s scheduling issues from November of 2013 until present, Cold Train lost most of its fresh produce business, including apples, onions, pears, potatoes, carrots and cherries, which was more than 70 percent of the company’s business. In addition to adversely impacting many Washington State fresh produce growers and shippers, BNSF’s scheduling changes have affected many retailers and wholesalers in the Midwest and East Coast that purchase Washington State fresh produce and frozen foods.”
According to data made available by Cold Train, use of intermodal transportation was growing from the Pacific Northwest. During 2010, Cold Train moved approximately 100 containers of perishables per month from Washington to the Midwest. By 2013, that number had risen to approximately 700 containers per month shipped from Washington and Portland, OR.
By the end of 2013, Cold Train anticipated it would be shipping 1,000 containers each month from the region.