Railex rolls out new wine warehouse

The Wallula facilty can handle up to 5 million cases for faster rail shipment around the country.

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WALLULA — It’s no surprise that in a storage and distribution center more than twice the size of Borleske Stadium the rows of inventory run as far as the eye can see.

What’s more difficult to fathom at the new $20 million Railex Wine Services Distribution Center, which was celebrated Thursday with a grand party at the Port of Walla Walla’s Dodd Road Business Park, is that there’s still space for so much more.

With about 2.2 million cases of wine from anchor client Ste. Michelle Wine Estates, the bonded wine storage and distribution center isn’t even halfway full, Railex officials said.

Modeled after the Railex produce warehouse just next door, the temperature-controlled facility could be a game-changer for the wine industry when it comes to shipping wines to the East Coast.

From the hub in Wallula, bottles will be shipped from wine country to retailers nationwide. They can also be imported from an Eastern port to the warehouse in Wallula.

The facility, which opened quietly Feb. 1 and has added 25 jobs, has capacity to store 5 million cases of wine with access to its dedicated train to the East Coast.

In his speech to the 100 or so people exalted for their part in the facility during a catered celebration Thursday, Railex’s New York-based Chief Executive Officer Andy Pollak said more construction is on the way.

The company has bought land in Jacksonville, Fla., for another shipping warehouse. A timeline for construction was not provided. But when it’s built, Railex will have hubs in all four corners of the country, allowing five-day dedicated rail service between them and an opportunity for Walla Walla and other regional goods to ship around the country.

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

Awestruck, he said the six-month construction schedule for the Railex Wine Services Distribution Center was a see-to-believe situation. In fact, he flew over Wednesday at 500 feet circling the facility for a look.

“It’s mind boggling to fly over and see what transpired in six months,” he said.

Duane Wollmuth, executive director of the Walla Walla Valley Wine Alliance, was similarly impressed Thursday during his first tour of the facility. He had attended the groundbreaking last September when it was just a field of dirt.

“It was hard to imagine how big this thing was going to be,” he marveled.

It’s not just the square footage that’s big. The facility’s existence could also be a game-changer in shipping for the wine industry.

Part of the cost of shipping to East Coast for Walla Walla and other Eastern Washington wineries has included trucking wines to the west side of the state for distribution. Now wineries can ship right out of Wallula, with storage and rail access all out of one place.

“There may be wineries that haven’t shipped back to the Northeast because of costs,” Wollumuth said. “This is obviously creating more opportunity.”

He said the facility will be most likely to affect maybe the largest 20 wineries in the Valley. The greatest crux of local wineries are boutique operations that don’t produce the volume to ship in mass quantity. But some of the smaller operations could find it beneficial to go in together and share space in the facility, as some have done with the Railex produce train.

“Everybody, in one way or another, benefits from projects like this.”

Jim Kleist, senior vice president of Railex’s West Coast operations in Wallula, said Woodinville-based Ste. Michelle is currently the only client and operators are working to perfect their distribution system.

“It’s a brand new startup. There’s going to be a learning curve. We want to get to where we’re doing the job very, very well,” he said.

They’re starting with a company that produces roughly 65 percent of Washington’s wines. Ste. Michelle’s portfolio includes Chateau Ste. Michelle, Columbia Crest, Northsar and Spring Valley Vineyards among many others. The company has utilized the Railex produce train to store and transport its wines for at least four years.

Thursday’s event was a massive celebration — complete with wine tasting and specially made wine souvenir boxes with wine donated by Ste. Michelle — to include crews from contractor Hansen-Rice Construction of Nampa, Idaho, subcontractors, utility providers and government officials who helped make the expansion possible.

The work included the sale of land by the Port of Walla Walla, plus a roughly $1 million investment from the Port and $300,000 from Walla Walla County for an access road and critical water infrastructure. The state provided another $2.75 million for the project.

The work builds Walla Walla’s tax base, bumping Railex up as one of the biggest property taxpayers in the county, said Port of Walla Walla Executive Director Jim Kuntz. “This is big,” Kuntz said.

The Port reportedly plans to extend rail to the new facility, too.

Vicki Hillhouse can be reached at vickihillhouse@wwub.com or 526-8321.

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