Patriot Rail to establish rail district in central California
Patriot Rail CEO John E. Fenton is hoping the creation of a new rail district in central California will be a boon not only for his company but also for agricultural producers in the region. Patriot Rail is part of a public-private partnership with local leaders to develop a rail district for central California. Patriot Rail will lease approximately 6,500 feet of track and related property to Merced County, and the company will invest $1.2 million to increase rail capacity there at the Castle Commerce Center. The lease’s term spans 20 years, but it could be renewed in subsequent years. Patriot Rail interchanges with BNSF (NYSE: BRK.B), meaning that agricultural producers will have expanded access to the West Coast ports as well to the domestic market. When local economic developers were pursuing options for a rail district, BNSF brought Patriot Rail to the table, according to Fenton. “We think this is a great opportunity for the state of California to make their farmers even that much more competitive around the world,” Fenton told FreightWaves.
Patriot Rail’s involvement in the rail district was in response to an area shipper’s needs. Tomato products producer Morning Star and its warehousing provider needed to expand their packaging capabilities, and so they were looking for an area to grow, according to Fenton. Locations such as Modesto, Stockton and Sacramento were already at capacity, so expanding production in the San Joaquin Valley was the next natural location, Fenton said. “The San Joaquin Valley is one of the agricultural centers of the world. And there’s a lot of tomatoes that come out of that region,” Fenton said. Fenton hopes to have Patriot Rail’s assets ready by May 1, which is when the pack season starts for Morning Star. The pack season involves 100 days of operations running 24/7. In that time, Morning Star produces about 9,000 cans of tomatoes per minute, Fenton said.
According to the California Tomato Growers Association, tomato producers in the state processed 11.3 million tons of tomatoes in 2020, and that production has a value worth $887 million. Other agricultural products in the region include almonds, wine and cheese. According to the Almond Board of California, the counties of Stanislaus, Merced and San Joaquin in central California produced 921 million pounds of almonds during the 2020-2021 crop year, representing nearly 30% of overall California almond production.
Although Patriot Rail and others aren’t sure yet how many carloads might come out of the rail district, the rail district provides shippers with the opportunity to build warehouses and expand production. “We are meeting with all the agricultural shippers in the region. We want them to have a say in what kind of services they’re looking for. … The demand is really high, and we’re going to start to piece that together. The first thing is to really understand what the demand will be so we can build the facility and plan the facility in the right way,’ Fenton said. “We’re still scoping that [demand] but over time, we think it will become a very large rail district in the state of California.”
The agreement with Merced County was executed with Patriot Rail subsidiary Foster Townsend Rail Logistics. “Castle Commerce Center has enormous potential and is quickly becoming a site of regional, national and international significance,” Merced County Supervisor Daron McDaniel said in a release last week. McDaniel’s district includes Castle. “Patriot is a major part of our vision for Castle, and we’re looking forward to working with the partners they bring to help expand this growth and spur future job creation.”