New details have emerged about Tiger Cool Express’ financial health leading up to the company’s abrupt closure on Tuesday.
A source familiar with the situation at the now-shuttered refrigerated rail shipping and logistics firm said Tiger Cool Express refinanced its equipment with Wells Fargo Bank a few years ago. The company had more than 700 53-foot temperature-controlled containers in its fleet, hauling produce, wine and frozen goods.
The company was doing well until last spring, when the refrigerated market “blew a tire” and volumes dropped significantly, which contributed to Tiger Cool Express falling behind on its loan payment to Wells Fargo, according to the source.
5-year ROTVI— Reefer Outbound Tender Volume Index, which measures load tenders or requests from shipper to carrier for reefer loads (Chart: SONAR)
Since Tiger Cool Express allegedly “broke its financial covenants” with Wells Fargo over the missed payments, the bank requested that the leased equipment be returned, the source said.
On Friday, Wells Fargo spokesperson Melissa Eckmann confirmed that Tiger Cool Express is a customer but declined to share any details about the company’s financial state.
Tiger Cool Express, which opened its doors in 2013, received $15 million from private equity firm Tiger Infrastructure Partners, which has offices in New York and London.
Emily Nevins, an executive assistant at Tiger Infrastructure Partners, said the private equity firm is aware of the situation at Tiger Cool Express but has no plans to issue a statement. Other executives at Tiger Infrastructure Partners did not respond to FreightWaves’ request for comment.
Tiger Cool Express executives, including Steve Van Kirk, CEO; Leslie Baird, chief commercial officer; and Theodore Prince, chief strategy officer, are also remaining silent about the closure of the logistics company. All three declined FreightWaves’ requests to be interviewed for this story.
One former Tiger Cool Express worker told FreightWaves that employees were fired during a Zoom meeting on Tuesday. The Kansas City Business Journal was the first news outlet to report on company’s closure.
Expansion plan hits the skids
Two months after Tiger Cool Express hosted a media day on April 12 to announce the future opening of Tiger Tri-Cities Logistics Center in Wallula, Washington, which was slated to open this month, the company abruptly pumped the brakes on the project and shut down the logistics company.
The source who spoke to FreightWaves claims the company was going to be unable to pay its contractors for construction work on the intermodal terminal because of ongoing cash constraints.
Patrick Reay, executive director at the Port of Walla Walla, said he found out Tiger Cool Express was ceasing operations from various news outlets.
He said the port’s only involvement is that it owns the rail line that would be utilized for the intermodal facility. He added that the port “isn’t involved on the operations side of things.”
“We are hopeful that new investors get involved and reconstitute the concept because it’s definitely a benefit to the Northwest,” Reay told FreightWaves.
In December 2022, Tiger Cool Express signed a lease-purchase agreement to acquire the former Union Pacific Cold Connect warehouse, some property and to build an adjacent intermodal ramp in Wallula, Washington.
In a press release issued in January about the agreement reached between Tiger Cool Express and Union Pacific Railroad to create Tiger Tri-Cities Logistics Center, Prince said the facility “has the potential to be a ‘triple threat.’”
Tiger Cool Express’ Van Kirk was also quoted in the release about the project, stating, “Despite our continued growth and fleet expansion, we realize that the Pacific Northwest offers transformational potential for our company.”
Reay said the buildings had remained closed since May 2020, when Union Pacific announced it was shuttering its Cold Connect refrigerated division and its Cold Connect warehouses in Wallula, Delano, California and Rotterdam, New York, citing “sluggish market conditions as a result of COVID-19.
In 2017, Union Pacific acquired Railex LLC’s cold storage facilities and terminals. Railex raised $58 million through a public-private partnership in 2006 to fund its expansive infrastructure project to launch a cross-country refrigerated rail service.
One former Tiger Cool Express worker thought the company was on solid footing after the company announced the deal with UP. The ex-employee hopes that Tiger Cool Express’ management team and/or Tiger Infrastructure Partners issues a statement soon to explain what caused the logistics firm to fold.
Do you have a news tip to share? Send me an email or message me @cage_writer on Twitter. Your name will not be used without your permission.
Read more here:
Union Pacific shutters operation of multimodal service Cold Connect
Truckers protest in LA after city ends hauling contracts over AB5
2 former employees charged with bilking $1.4M from carrier MH Group
The post Tiger Cool Express ceases operations amid financial troubles appeared first on FreightWaves.
