Ste Michelle Wine Estates has partnered with Railex to develop a temperature-controlled rail-based system to transport wine across the US.

Under the partnership, Railex will invest $18-20m to build and operate a 500,000ft² wine storage and distribution center in Wallula, Washington.

Scheduled to open in February 2013, the Railex Wine Services Distribution Center at Wallula will offer refrigerated, humidity-controlled storage and extra services to manage inventory and transportation logistics to better respond to customer requests.

Washington-based Ste Michelle Wine Estates had earlier signed a long-term lease with Railex for its warehouse footprint.

Using the rail-based system, the company’s three distribution facilities at Wallula, Delano (California) and Rotterdam (New York) will transfer finished goods from wine country to retailers throughout the nation or imported wines from an Eastern port to the Wallula warehouse.

According to Railex, the rail-based system will be a five-day transit from West Coast locations to New York.

Ste Michelle Wine Estates operations vice president Rob McKinney said, though the company has expertise with transportation and distribution issues, the business now has grown to a scale that requires a third-party logistics provider to manage its distribution requirements.

Railex west coast operations senior vice president Jim Kleist said the company is uniquely positioned to provide the highest level of customer service to Ste Michelle Wine Estates, their employees and customer base.

"Our location in the heart of Washington wine country, the latest inventory control and warehouse management technologies and high-speed refrigerated rail transportation will enable us to deliver wine quickly while maintaining the highest standards of quality," Kleist said.