Union Pacific cutting 162 jobs and closing Railex warehouse in Rotterdam
Union Pacific Railroad has closed its Cold Connect operation, the former Railex that delivered produce and other perishables from the West Coast to its distribution center at the Rotterdam Industrial Park. Most of the 162 jobs at the facility are being eliminated, although a Union Pacific spokesperson wasn’t immediately available to comment.
Workers were notified Friday that the service would be ending, according to published reports.
“This decision was not made lightly,” UP spokesman Tim McMahan told Progressive Railroading. “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.”
Long Island-based Railex launched the coast-to-coast train service in October 2006 with Union Pacific operating the trains as far east as Chicago and CSX taking them the rest of the way to Rotterdam, outside Schenectady, where Railex built an $18 million facility.
From there, produce and other perishables would be shipped to grocery retailers throughout the Northeast.
The service was established at a time when there was a shortage of truck drivers and diesel fuel prices were rising. Railex touted the environmental advantages of rail and the number of trucks each train took off the highways, with 55 box cars replacing 200 tractor trailers.
Shippers and their customers could track their orders online and monitor temperatures inside each box car. The trains stopped only for crew changes, making the coast-to-coast trip in as little as five days.
A second warehouse, in Delano, Calif., was added to the warehouse in Wallula, Wash., bringing additional perishables from California’s Central Valley.
And by 2014, Railex was planning a $12 million addition to its Rotterdam warehouse, creating another 100 jobs at the facility, which at that point employed 300 people.
When Union Pacific purchased Railex for an undisclosed price in April 2017, the Rotterdam facility employed just 138 people, according to the WARN filing Railex made with the state Labor Department. In recent years, Union Pacific declined to share much information about how well Cold Connect was performing.
The railroad told Railway Age magazine that a reduced staff would be maintained in Rotterdam to handle shipments that are still in transit.
“The announcement by Union Pacific related to the Cold Connect operation in Rotterdam demonstrates the negative impact that this pandemic is having on the economy,” said Ray Gillen, who chairs the Schenectady County Metroplex Development Authority. “We will do everything possible to assist impacted workers and we have already received interest from potential tenants in the 227,000 square foot facility located at the Rotterdam Corporate Park.”