No sour grapes

The way wine moves from the vineyard to the end consumer — surmounting temperature and breakage challenges along the way — provides valuable insights for shippers handling all sorts of products. And perhaps the most eye-opening revelation is that for wine merchants, shipping by rail is often the preferred mode.

“Boxcar actually provides more protection to the product than standard dry van service, either on over the road or intermodal,” says Rodney Dutton, director of transportation management for Canandaigua Wine Co. (www.cwine.com). “Even intermodal insulated equipment is not as effective as a boxcar for us.”

Located in the Finger Lakes Region of New York State, Canandaigua has nationwide reach, producing and marketing many of the nation’s best known wine brands, including Almaden, Arbor Mist, Inglenook, Manischewitz, Paul Masson and Wild Irish Rose.

As Dutton explains, Canandaigua brings in grapes at a variety of locations, crushes them, makes wine, bottles it, puts it in cases, puts it on pallets or slip sheets and ships it out the door to distributors. In the U.S., the wine business is three-tiered, with producers shipping to distributors and distributors shipping to retailers.

Canandaigua has two wineries and a warehouse in New York and several facilities in California, two of which are major case goods shipping locations — Lodi and Madera. With the exception of one distribution center in Auburn, Wash., serving the Pacific Northwest, the company ships direct to distributors.

In transportation management, Canandaigua works with carriers in developing rates, contracts, agreements and so forth, Dutton says. “Then we provide a carrier routing guide for our wineries to follow on a day-to-day basis.”

Most of Canandaigua’s product from California moves east of the Mississippi. Its primary mode of transportation has always been intermodal, although the company uses truck regionally for the Western states.

“We have a small private fleet in New York for regional operations,” says Dutton. “but for intermodal we use about a half dozen carriers, the Hub Group, Inc. (www.hubgroup.com) being one of the largest. For truckload, we use a variety of carriers, like Swift, J.B. Hunt and Schneider. We have rates from all of them for a variety of services and call upon them as the services are needed in a given lane.”

For rail, Canandaigua uses Wine Connection, a partnership between CSX (www.csx.com) and Union Pacific (www.up.com) railroads, the Hub Group, and Cryo-Trans Inc. (www.cryo-trans.com), a developer of refrigerated boxcars.

Burke Anderson, Hub’s director of railcar services, explains that his company’s primary role is as the sales and marketing agent for Wine Connection. “We have relationships with the wineries and many of the distributors that control the routing,” he says.

The Wine Connection developed out of UP’s desire to grow its wine business. The challenge for the railroad was that most wineries are too small to have direct rail and don’t necessarily ship enough into a given regional market to justify a forward distribution center. Boxcar movement became the answer.

Cryo-Trans dedicated 200 of its refrigerated cars to the Wine Connection service. These carbon dioxide-charged, heavily insulated cars were originally developed to move frozen French fries out of the Pacific Northwest for clients like Simplot and LambWesson. The frozen French fry industry has since moved to using 70-foot reefer cars, making the older Cryo-Trans cars somewhat obsolete for the French fry business — but quite suitable for the needs of wine shippers. The carbon dioxide units were removed, leaving a heavily insulated 60-foot car, high enough to permit double-stacking the wine.

At Madera, Canandaigua has a facility permitting direct boxcar loading. If the distributor has no boxcar siding, Hub arranges for a cross dock at a public warehouse, and delivers in truckloads to Canandaigua’s distributor.

For smaller wine shippers, Hub picks up either through direct full loads or less-than-pallet consolidations from every winery in northern California.

Anderson says Hub can put 4,000 cases of wine from 30 different wineries in one boxcar, then move the shipment across the country in Cryo-Trans cars. CSX takes over the cars in Chicago and delivers them to Hub’s rail-served warehouses. The wine moves on UP and CSX Express lane service, which handles primarily perishable traffic.

With reliable delivery and temperature issues being met, matters of damage to wine in bottles had to be solved, as well. “Boxcar historically has been a risky proposition in regard to damage,” says Dutton. “We have mitigated that by developing a loading process that nicely fits into a boxcar. We stack like cases in a boxcar, then put in tight-fitting dunnage, which prevents shifting from side to side. So we really don’t have a lot of railroad-created damage problems with boxcar.”

The Wine Connection fulfills another Canandaigua need. “We require carriers to provide us daily reports on the status of each load,” says Dutton. “Then if there is an exception, or some issue creating a delayed delivery, we require a personal phone call. Working with the carrier, we resolve the issue and then inform the distributor, our customer.” LT