Railex Opens $20 Million Wallula Wine Distribution Center

By Kristi Pihl, April 26, 2013, Tri-City Herald

Wine from 14 Hands and Columbia Crest was poured Thursday to celebrate the new warehouse and distribution center near Wallula that will help those Washington vintages reach nationwide customers.

More than 100 people gathered at Railex’s $20 million Railex Wine Services center to mark its grand opening.

The center is the size of 11 football fields and already is storing about 2.2 million cases of Ste. Michelle Wine Estates wine at a cool 55 degrees, said Jim Kleist, senior vice president of West Coast operations for Railex.

That’s something Railex and Ste. Michelle officials say sets the wine company apart — its focus on preserving the taste of its wine by making sure it is kept at the right temperature as it travels to customers.

Ste. Michelle Wine Estates, which produces about 65 percent of the wine made in Washington, is Railex Wine Service’s anchor customer for the warehouse at the Port of Walla Walla’s Dodd Road Business Park off of Highway 12.

Bob Warwick, Ste. Michelle’s director of distribution and logistics, said as of April 1, Railex was handling about 98 percent of wine shipping for the company, using rail and trucking.

Columbia Crest in Paterson still is handling online orders, but eventually that too will be done by Railex, he said.

Before the expansion, Railex was shipping about 1 million cases of Ste. Michelle’s wine each year. In addition, trains from Washington now deliver produce, such as apples, onions and frozen vegetables, to the East Coast in their refrigerated, temperature-controlled freight cars.

Ste. Michelle was getting to the point where the company either needed to build its own facility, or work with another company to provide storage and transportation services, Warwick said.

“Our focus is to be recognized as the premier wine company in the world,” Warwick said.

This year, Ste. Michelle expects to ship about 8 million cases, he said. Railex will be shipping more than 6 million of those cases.

“We are growing so fast,” Warwick said.

Ste. Michelle owns Washington wineries such as Chateau Ste. Michelle, Columbia Crest, Snoqualmie, Northstar and Spring Valley. It also co-owns Col Solare on Red Mountain with Italy’s Antinori family.

Ste. Michelle Wine Estates, which is headquartered in Woodinville, has 10 brands in Washington, one in Oregon, four in California and partnerships with 13 others, including Dr. Loosen of Germany.

For now, Railex Wine Estates only is storing Ste. Michelle’s wine, but the company plans soon to open its services to other wineries in the Northwest, Kleist said.

“This is a startup,” he said. “This is huge. This is new.”

The new temperature- and humidity-controlled facility, which can store up to 5 million cases of wine, was built in six months. Kleist credited Hansen-Rice of Nampa, Idaho, and various subcontractors for making the rapid progress possible.

Andy Pollak, Railex owner and CEO, said the project would not have been possible without Ste. Michelle.

“We have big plans for the future,” he said.

Railex, which also has facilities in California and New York, plans to build a new facility in Jacksonville, Fla. That will allow Railex to transport Ste. Michelle’s wines to more places in the nation.

Railex already has added 25 jobs, and plans to add more in the near future, Neuhauser said.

Kleist said they could end up close to 100 jobs, since train traffic at the Railex transload facility is also expected to double to four trains a week after the new Railex facility opens in the southeast.

Port of Walla Walla Commissioner Mike Fredrickson said Railex’s expansion helps Walla Walla, Benton, Franklin and Umatilla counties because that’s where the work force comes from.

It also adds to Walla Walla County’s tax base and fits into the economic development dreams the port has for the Dodd Road Business Park, he said.

The port will extend rail to the new facility in a $2.2 million project, Fredrickson said.

One new rail spur will be added near the current transload facility, and another will go to the north side of the new wine warehouse and distribution center, Kleist said. That will allow the wine to be moved by forklift directly into the temperature-controlled Railex unit train.

The port will receive increased rail fees from Railex, which will pay for the project. Fredrickson said that will also help create revenue for more economic development efforts.

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