About 170 warehouse workers will lose their jobs after Union Pacific decided to shut down its refrigerated railcar service south of the Tri-Cities.
The Cold Connect service linking Washington and California growers to East Coast markets is closing because of dropping shipping rates and consumers moving away from fresh produce because of the coronavirus.
“On Friday, May 8, we notified employees that Cold Connect, a Loup Logistics service that moves refrigerated products from the West Coast to Union Pacific’s warehouse in Rotterdam, New York, will permanently close and most Cold Connect-related positions have been eliminated,” said a company statement.
This includes nearly 170 people working at the 225,000-square-foot warehouse in Wallula that served as one end of the shipping line.
Union Pacific bought the facility in 2017 after the service operated as Railex for more than 10 years.
Many of those employees live in the Tri-Cities area, said Ajsa Suljic, a regional labor economist with the state Employment Security Department.
Freight Waves, a shipping trade publication, said railroad officials said the 3-year-old service is closing because of sagging freight shipping rates and because consumers have switched to more shelf-stable foods than perishable produce.
“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,” said the company statement.
Suljic noted, however, that warehousing jobs have not been hit as hard as other industries by the closures from the coronavirus and COVID-19 pandemic.
Cold Connect history
Union Pacific created the Cold Connect service, in part, with the $15.5 million purchase of the Wallula property in the Dodd Road Industrial Park, along with a Delano, Calif., warehouse and the Rotterdam destination.
The idea was to create a direct route to bring West Coast produce to East Coast tables.
At the time, they billed it as a way for shippers to consolidate their distribution costs.
The service was featured in the American Journal of Transportation, which said the Wallula facility had annual shipments of 750 million pounds of produce, including potatoes, onions, apples and wine.
The goal was to cut the amount of waste. One-third of all fresh fruits and vegetables produced across the world is lost because of a lack of space in refrigerated trucks.
With the loss of the service, farmers across the region will need to find other shipping modes.
The Port of Walla Walla is discussing what will happen to the facility.