Running on Ice: Kansas City thrust into the spotlight again

In this edition: The evolution of the Midwest Mexico Express, Polar Leasing expansion and Walmart develops a new brand.

Mary O'Connell

8 months ago

All thawed out

Around this time last year, Canadian Pacific Kansas City announced a new service, the Midwest Mexico Express. The service was developed as a solution for moving freight to and from Mexico to the middle of the U.S. The transit time via rail is a day faster than the nearest competitor. Given the amount of nearshoring and development happening in Mexico, the new line could not have come at a better time.

Fast forward to this year, and Americold has broken ground on a cold storage facility in Kansas City, Missouri, right on the CPKC rail network. The new facility is a cool $127 million, includes about 335,000 square feet and is being developed in collaboration with CPKC to support the Midwest Mexico Express line.

Keith Creel, president and CEO of CPKC, said in a news release, “This project is the first of many across our network and, when combined with our unparalleled cross-border service, will build a new refrigerated supply chain for our customers. Just over one year ago here in Kansas City, when we celebrated the creation of CPKC, we talked about the unique economic benefits our unrivaled network would bring to Kansas City, Missouri and beyond. We are seeing that happen today.”

Temperature Checks

The Sunshine State got a little brighter as Polar Leasing has opened a new facility in Sumterville, Florida. The facility is different in the fact that it is wholly owned and operated by Polar Leasing versus the more commonly found dealers and freight partners. Polar Leasing offers ground-resting, ready-to-use walk-in rental units. Polar Leasing is actually the guest on Running on Ice this week, and we break down when to buy versus lease a unit and what some of the more common industries that utilize the leasing model are. Catch the episode on YouTube.

Bart Tippman, president of Polar Leasing, said in a news release, “The launch of our Sumterville facility underscores our ongoing commitment to enhancing proximity to customers nationwide. We’re enthusiastic about the opportunities this investment brings to better cater to the evolving needs of businesses in Florida and neighboring states, ensuring they have access to dependable and efficient cold storage solutions.”

Food and Drug

First-quarter earnings releases have been coming in over the past few weeks and with it a general sentiment from companies that consumers are looking to trade down and prioritize affordability. It’s one of the main reasons we’ve seen store brands at the grocery store take off following the pandemic. The freezer aisle has been subject to these trade-downs as well, and Walmart is looking to capitalize on that.

Walmart has announced a new store-label food brand seeking to appeal to younger customers who haven’t quite thrown their brand loyalty one way or the other. The brand is called Bettergoods and is expected to have more than 300 products in the line by the fall, including frozen food. The prices for these goods are expected to range from under $2 to about $15, with most being under $5.

Scott Morris, senior vice president for private brands, food and consumables at Walmart, said in a news release, “Bettergoods is more than just a new private brand. It’s a commitment to our customers that they can enjoy unique culinary flavors at the incredible value Walmart delivers.” Those culinary flavors are including affordable plant-based alternatives and those “made without,” aimed at those with different dietary lifestyles such as gluten-free and made without artificial flavors.

Cold chain lanes

This week’s reefer market is none other than the home of Southwest Airlines, Dallas. Reefer outbound tender volumes are up 7.31%. On the other hand, reefer outbound tender rejection rates are up 428 basis points. With rejections rising quickly, that normally indicates that there would be some upward pressure on spot rates; However, given that outbound tender volumes are also rising, the change in spot rates would be minimal.

Overall rejection rates are well within the normal range for this time of year – the calm before the storm that is produce season. That switch could flip any day. Watch the Southern part of the country, like South Florida and Texas, for that switch, which will put some pressure on spot rates.

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