Document:

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                                                                   EXHIBIT 10.33

                             EMPLOYMENT AGREEMENT

     This EMPLOYMENT AGREEMENT (this "Agreement"), dated as of October 31, 2000,
                                      ---------
is by and among RFI Group, Inc., a Delaware corporation (the "Company"), Pacer
                                                              -------
International, Inc., a Tennessee corporation ("Pacer"), and Alan E. Baer (the
                                               -----
"Employee").
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                                   PREAMBLE

     On the date hereof, Pacer is acquiring all of the outstanding capital stock
of the Company pursuant to the Stock Purchase Agreement dated as of October 31,
2000 (the "Purchase Agreement"), by and among Pacer, the Employee, the other
           ------------------
stockholders of the Company, and certain other individuals and entities (the
"Acquisition").  In order to induce Pacer to consummate the Acquisition, the
 -----------
Employee has agreed to enter into this Agreement to assure to the Company the
benefits of the continued experience and services of the Employee, all on the
terms and subject to the conditions contained in this Agreement.

     ACCORDINGLY, in consideration of the mutual representations, warranties,
covenants and agreements set forth in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the Company, Pacer and the Employee, the Company, Pacer and the
Employee hereby agree as follows:

     Section 1.     Duties.  On the terms and subject to the conditions
                    ------
contained in this Agreement, the Employee will be employed by the Company as its
Chief Operating Officer and Vice President.  The Employee shall perform such
duties and services on behalf of the Company and its subsidiaries and other
affiliates consistent with such position as reasonably may be assigned to the
Employee from time to time by the Company's Board of Directors (the "Board"),
                                                                     -----
the Chairman of the Board or the Company's President.  Anything contained in
this Section 1 or elsewhere in this Agreement to the contrary notwithstanding,
the Employee acknowledges and agrees that the Employee's position and/or title
with the Company is subject to change in the event that the Company is merged
with or into or otherwise consolidated or combined with or into Pacer or any of
its subsidiaries or other affiliates.

     Section 2.     Term.  Unless sooner terminated in accordance with the
                    ----
applicable provisions of this Agreement, the Employee's employment hereunder
shall be for the period (the "Employment Period") commencing on the date hereof
                              -----------------
(the "Commencement Date") and ending on the third anniversary of the date hereof
      -----------------
(the "Scheduled Expiration Date").
      -------------------------

     Section 3.     Time to be Devoted to Employment.  During the Employment
                    --------------------------------
Period, the Employee shall devote all of the Employee's working energies,
efforts, interest, abilities and time exclusively to the business and affairs of
the Company and its subsidiaries and other affiliates.  The Employee shall not
engage in any other business or activity that, in the reasonable judgment of the
Board, would conflict or interfere with the performance of the Employee's duties
as set forth herein, whether or not such activity is pursued for gain, profit or
other pecuniary advantage; provided, however, that nothing contained in this
                           --------  -------
Section 3 shall be construed as prohibiting the Employee from serving on the
Port Washington School Board or from engaging in other charitable, community
service or civic activities, so long as such

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activities do not, in the reasonable judgment of the Board, conflict or
interfere with the Employee's performance of his duties and obligations under
this Agreement.

     Section 4.     Base Salary; Bonus; Benefits.
                    ----------------------------

          (a)  During the Employment Period, the Company (or any of its
subsidiaries or other affiliates, including Pacer, if applicable), shall pay the
Employee a minimum annual base salary (the "Base Salary") of $250,000, payable
                                            -----------
in such installments (but not less often than monthly) as is generally the
policy of Pacer and its subsidiaries from time to time with respect to the
payment of regular compensation to their respective executive officers.  During
the Employment Period, the Employee will be entitled to (i) no less than four
(4) weeks vacation per year occurring during the Employment Period, taken in
accordance with the Company's policy in effect from time to time, and (ii) such
other benefits as may be made available from time to time to other executive
officers of Pacer and its subsidiaries generally, including, without limitation,
participation in such health, life and disability insurance programs, stock
option plans, and retirement or savings plans, if any, as Pacer and its
subsidiaries may from time to time maintain in effect, subject to Pacer's and
its subsidiaries' rights from time to time to amend, modify, change or terminate
in any respect any of their respective employee benefit plans, policies,
programs or benefits.

          (b)  In addition to the Base Salary and benefits set forth in Section
4(a), during the Employment Period, the Employee will be entitled to receive a
cash incentive bonus (the "Performance Bonus"), if any, of up to thirty percent
                           -----------------
(30%) of the Employee's Base Salary with respect to each calendar year occurring
during the Employment Period, such bonus to be paid by the Company (or any of
its subsidiaries or other affiliates, including Pacer, if applicable), in a lump
sum following the end of the calendar year with respect to which such bonus is
payable (such payment to be made at or within the same time or times that
performance bonuses are paid to the other executive officers of Pacer and its
subsidiaries).  The Performance Bonus, if any, payable with respect to any
calendar year shall be determined reasonably by the Board based (i) fifty
percent (50%) on Pacer's operating income and/or other results of operations for
such calendar year, provided that such income and/or other results are favorable
                    --------
when compared to Pacer's budget (as approved by Pacer's Board of Directors) for
such calendar year, and (ii) fifty percent (50%) on the Company's operating
income and/or other results of operations for such calendar year, provided that
                                                                  --------
such income and/or results are favorable when compared to the Company's budget
(as approved by the Board) for such calendar year.  Anything contained in this
Agreement to the contrary notwithstanding, if the Employee's employment with the
Company is terminated for any reason, other than a termination by the Company
without "cause" pursuant to Section 7(b), neither the Company nor any of its
subsidiaries or other affiliates, including Pacer, shall be obligated to pay the
Employee any Performance Bonus with respect to the calendar year of the Company
in which such termination occurred or thereafter.  If the Employee's employment
with the Company is terminated by the Company without "cause" pursuant to
Section 7(b), the Employee shall be entitled to receive that portion of the
Performance Bonus, if any, payable for the calendar year of the Company during
which such termination occurs, pro rated through the date of such termination
based on the number of days elapsed through the termination date over 365 days,
payable in accordance with the first sentence of this Section 4(b).

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          (c)  All references herein to compensation to be paid to the Employee
are to the gross amounts thereof that may be due hereunder.  The Company (or any
of its subsidiaries or other affiliates, including Pacer, if applicable) shall
have the right to deduct therefrom all sums that may be required to be deducted
or withheld under any provision of law (including, without limitation, social
security payments, income tax withholding, and any other deduction required by
law) as in effect at all relevant times during the term of this Agreement.

     Section 5.     Reimbursement of Expenses.  During the Employment Period,
                    -------------------------
the Company (or any of its subsidiaries or other affiliates, including Pacer, if
applicable) shall reimburse the Employee in accordance with the Company's policy
for all reasonable and necessary traveling expenses and other disbursements
incurred by the Employee for or on behalf of the Company in connection with the
performance of the Employee's duties hereunder upon presentation of appropriate
receipts or other documentation therefor, in accordance with all applicable
policies of the Company.

     Section 6.     Disability or Death.  If, during the Employment Period, the
                    -------------------
Employee is incapacitated or disabled by accident, sickness or otherwise (a
"Disability") so as to render the Employee mentally or physically incapable of
 ----------
performing the services required to be performed by the Employee under this
Agreement for any period of ninety (90) consecutive days or for an aggregate of
one hundred and eighty (180) days in any period of three hundred and sixty (360)
consecutive days, the Company may, at any time thereafter, at its option,
terminate the Employee's employment under this Agreement immediately upon giving
the Employee not less than five (5) day's prior written notice to that effect.
In the event of the Employee's death, the Employee's employment will be deemed
terminated as of the date of death.

     Section 7.     Termination.
                    -----------

          (a)  The Company may terminate the Employee's employment hereunder at
any time for "cause" by giving the Employee written notice of such termination,
containing reasonable specificity of the grounds therefor.  For purposes of this
Agreement, "cause" shall mean  (i) the Employee's willful misconduct with
respect to the business and affairs of the Company or any of its subsidiaries or
other affiliates, (ii) the Employee's willful neglect of the Employee's duties
or the Employee's failure to follow the lawful directions of the Board, the
Chairman of the Board or the Company's President, including, without limitation,
the willful violation of any material policy of the Company or any of its
subsidiaries or other affiliates that is applicable to the Employee, (iii) the
Employee's material breach of any of the provisions of this Agreement or any
other written agreement between the Employee and the Company or any of its
subsidiaries or other affiliates and, if such breach is capable of being cured,
the Employee's failure to cure such breach within thirty (30) days of receipt of
written notice thereof from the Company or any of its subsidiaries or other
affiliates, (iv) the Employee's commission of a felony, (v) the Employee's
commission of an act of fraud or financial dishonesty with respect to the
Company or any of its subsidiaries or other affiliates, or (vi) the Employee's
conviction for a crime involving moral turpitude or fraud.  A termination
pursuant to this Section 7(a) shall take effect immediately upon the giving of
the notice contemplated hereby, or, in the case of clause (iii) of this Section
7(a), immediately following the expiration of the thirty (30) day notice and
cure period provided for therein if the Employee fails to cure.

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          (b)  The Company may terminate the Employee's employment hereunder at
any time without "cause" by giving the Employee written notice of such
termination, which termination shall be effective as of the later of the date
set forth in such notice and the date such notice is deemed received by the
Employee.  In addition to a termination without "cause" as contemplated by the
first sentence of this Section 7(b), for purposes of this Agreement the Employee
also shall be deemed to be terminated without "cause" if the Employee
voluntarily resigns within fifteen (15) days after (i) he is demoted from his
position as Chief Operating Officer and Vice President, except as provided in
Section 1, or (ii) his principal office is relocated to any location that is
more than fifty (50) miles from the New York metropolitan area, in either case
in clause (i) or clause (ii) without the Employee's consent, which consent shall
not be unreasonably withheld.

     Section 8.     Effect of Termination.
                    ---------------------

          (a)  Upon the effective date of termination of the Employee's
employment under this Agreement for any reason other than a termination by the
Company without "cause" pursuant to Section 7(b), neither the Employee nor the
Employee's beneficiaries or estate shall have any claims against the Company or
any of its subsidiaries or other affiliates arising out of this Agreement
(except the right to claim that the Company or Pacer has breached a provision of
this Agreement) or any further rights under this Agreement, except the right to
receive, within thirty (30) days after the effective date of such termination
(or such earlier period as may be required by applicable law):

               (i)   the unpaid portion of the Base Salary provided for in
     Section 4(a), computed on a per diem basis to the effective date of such
                                 --- ----
     termination;

               (ii)  reimbursement for any expenses for which the Employee shall
     not have theretofore been reimbursed, as provided in Section 5; and

               (iii) the unpaid portion of any amounts earned by the Employee
     prior to the effective date of such termination pursuant to any benefit
     program in which the Employee participated during the Employment Period;
     provided, however, that the Employee shall not be entitled to receive any
     --------  -------
     benefits under any benefit program that have accrued during any period if
     the terms of such program require that the beneficiary be employed by the
     Company as of the end of such period.

          (b)  Upon the effective date of termination of the Employee's
employment under this Agreement by the Company without "cause" pursuant to
Section 7(b), neither the Employee nor the Employee's beneficiaries or estate
shall have any claims against the Company or any of its subsidiaries or other
affiliates arising out of this Agreement (except the right to claim that the
Company or Pacer has breached a provision of this Agreement) or any further
rights under this Agreement, except the right to receive, within thirty (30)
days after the effective date of such termination, in the case of amounts due
pursuant to clause (i) below, and at such other times as provided in clauses
(ii) and (iii) below in the case of amounts due thereunder (or in each case such
earlier period as may be required by applicable law):

               (i)   the payments, if any, referred to in Section 8(a);

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               (ii)  the right to continue to receive the Base Salary for the
     period commencing on the effective date of such termination and ending on
     the Scheduled Expiration Date, and, if the Company exercises its option
     pursuant to Section 9(d), the right to continue to receive fifty percent
     (50%) of the Base Salary for the period commencing on the next day after
     the Scheduled Expiration Date and ending on the last day of the Extended
     Non-competition Period (as defined in Section 9(d)), in each case payable
     during such period in such manner as the Base Salary is payable pursuant to
     Section 4(a), and in each case reduced by fifty percent (50%) of any
     amounts in excess of $2,500 per month that the Employee (or the Employee's
     beneficiaries or estate) receives or is entitled to receive as salary or
     other cash compensation from subsequent employment or for services rendered
     (or agreed to be rendered) during or with respect to such period, up to a
     maximum of all amounts due to the Employee under this Section 8(b)(ii) (and
     in order to carry out the intent of the foregoing, the Employee agrees, for
     the Employee and the Employee's beneficiaries or estate, to provide the
     Company within five (5) days following the Company's request therefor with
     such information as the Company may reasonably request regarding the
     receipt of, or right to receive, such salary and other cash compensation
     from subsequent employment or for services rendered (or agreed to be
     rendered) during or with respect to such period); and

               (iii) the right to receive any Performance Bonus (or portion
     thereof), if any, payable in accordance with Section 4(b) with respect to
     the calendar year during which such termination occurs.

     Section 9.     Disclosure of Information; Noncompetition.
                    -----------------------------------------

          (a)  From and after the date hereof, the Employee shall not at any
time use or disclose, divulge, furnish, or make accessible to any person or
entity (other than any officer, director, employee, affiliate or representative
of the Company), except as required in connection with the performance of the
Employee's duties under and in compliance with this Agreement and as required by
law and judicial process (after giving the Company reasonably timely notice of
the receipt of any such legal or judicial requirement), any Confidential
Information (as defined in Section 9(b)) heretofore acquired or acquired during
the Employment Period for any reason or purpose whatsoever, nor shall the
Employee make use of any of the Confidential Information for the Employee's own
purposes or for the benefit of any person or entity except the Company or any of
its subsidiaries or other affiliates.

          (b)  For purposes of this Agreement, "Confidential Information" means
                                                ------------------------
(i) the Intellectual Property Rights (as defined in Section 9(c)) of the Company
and its subsidiaries and other affiliates, and (ii) all other information of a
proprietary or confidential nature relating to the Company or any of its
subsidiaries or other affiliates, or the business or assets of the Company or
any of its subsidiaries or other affiliates, including, without limitation,
books, records, agent and independent contractor lists and related information,
customer lists and related information, vendor lists and related information,
supplier lists and related information, distribution channels, pricing
information, cost information, marketing plans, strategies, forecasts, financial
statements, budgets and projections, other than (i) information that is
generally available to the public on the date hereof, or that becomes generally
available to the public after the date hereof without action

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by the Employee, or (ii) information that the Employee receives from a third
party who does not have any independent obligation to the Company to keep such
information confidential.

          (c)  For purposes of this Agreement, the term "Intellectual Property
                                                         ---------------------
Rights" means all industrial and intellectual property rights, including,
------
without limitation, patents, patent applications, letters patent, patent rights,
trademarks, trademark applications, trade names, service marks, service mark
applications, copyrights, copyright applications, know-how, certificates of
public convenience and necessity, franchises, licenses, trade secrets,
proprietary processes and formulae, inventions, discoveries, improvements,
ideas, development tools, marketing materials, instructions, confidential
information, trade dress, logos and designs, and all documentation and media
constituting, describing or relating to the foregoing, including, without
limitation, manuals, memoranda and records.

          (d)  The Employee shall not during the Employment Period and the Non-
competition Period (as hereinafter defined) (i) in any geographic area where the
Company or any of its subsidiaries or other affiliates conducts business during
the Non-competition Period, engage in or participate in, directly or indirectly
(whether as an officer, director, employee, partner, consultant, holder of an
equity or debt investment, lender or in any other manner or capacity, including,
without limitation, by the rendering of services or advice to any person), or
lend his name (or any part or variant thereof) to, any Competing Business (as
defined in Section 9(e)); (ii) deal, directly or indirectly, in a competitive
manner with any customers doing business with the Company or any of its
subsidiaries or other affiliates during the Non-competition Period; (iii)
solicit or employ any officer, director or agent of the Company or any of its
subsidiaries or other affiliates to become an officer, director, or agent of the
Employee, the Employee's affiliates or anyone else; or (iv) engage in or
participate in, directly or indirectly, any business conducted under any name
that shall be the same as or similar to the name of the Company or any of its
subsidiaries or other affiliates or any trade name used by any of them.  The
Employee's ownership for investment purposes only of less than two percent (2%)
of the outstanding shares of capital stock or class of debt securities of any
corporation with one or more classes of its capital stock listed on a national
securities exchange or actively traded in the over-the-counter market, shall not
constitute a breach of the foregoing covenant.  The Employee is entering into
the foregoing covenant to induce the Company to extend this Agreement to, and to
enter into this Agreement with, the Employee and to assure Pacer of the transfer
of the goodwill of the Company in connection with the Acquisition and to induce
Pacer to consummate the Acquisition.  For purposes of this Agreement, "Non-
                                                                       ---
competition Period" means the period commencing on the effective date of the
------------------
termination of the Employee's employment with the Company and its subsidiaries
and other affiliates for any reason and ending on either (i) the second
anniversary of the effective date of such termination of employment if such
termination of employment occurs for any reason other than a termination by the
Company without "cause" pursuant to Section 7(b), or (ii) the Scheduled
Expiration Date if such termination of employment occurs as a result of a
termination by the Company without "cause" pursuant to Section 7(b), as
applicable; provided, however, that if clause (ii) is applicable, the Company,
            --------  -------
at its option exercisable in its sole and absolute discretion, may extend the
expiration of the Non-competition Period to a date not later than the second
anniversary of the Scheduled Expiration Date (such extended period being called
the "Extended Non-competition Period") by specifying such date in a written
     -------------------------------
notice provided to the Employee.  In the event the Company elects to extend the
expiration of the Non-competition Period pursuant to the preceding sentence, the

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Employee shall have the right to continue to receive fifty percent (50%) of the
Base Salary for the Extended Non-competition Period, as provided in Section
8(b)(ii).

          (e)  For purposes of this Agreement, the term "Competing Business"
                                                         ------------------
means any transportation or other business that the Company or any of its
subsidiaries or other affiliates has engaged in at any time during the
Employment Period in any city or county in any state of the United States, or in
any similar political division of any state, province, canton or other similar
governmental entity in Canada, Mexico, China, Japan or any country or other
sovereign entity in Europe, including, without limitation, any business engaged
in (i) intermodal marketing, (ii) flatbed specialized hauling services, (iii)
less-than-truckload common carrier services, (iv) drayage, consolidation,
deconsolidation or distribution services, (v) contract warehousing, freight
handling or logistic services, (vi) comprehensive transportation management
programs or services to third party customers, (vii) freight consolidation and
deconsolidation, (viii) traffic management, (ix) railroad signal project
management, (x) freight forwarding and related services (including freight
brokerage and handling), (xi) customs brokerage, (xii) transportation brokerage,
and (xiii) freight transportation (including FCL and LCL transportation
services).

     Section 10.    Inventions Assignment.  During the Employment Period, the
                    ---------------------
Employee shall promptly disclose, grant and assign to the Company for its and
its subsidiaries' and other affiliates' sole use and benefit any and all
inventions, improvements, technical information and suggestions reasonably
relating to the business of the Company and its subsidiaries and other
affiliates (collectively, the "Inventions") that the Employee may develop or
                               ----------
acquire during the Employment Period (whether or not during usual working
hours), together with all Intellectual Property Rights associated with or
related to the Inventions.  In connection with the previous sentence, (a) the
Employee, at the expense of the Company (including a reasonable payment (based
on the Employee's last per diem earnings) for the time involved if the Employee
is not then in the Company's employ or receiving severance payments from the
Company pursuant to Section 8(b)(ii), or if the Employee has not received any
severance payment with respect to such time period), shall execute and deliver
promptly such applications, assignments, descriptions and other instruments as
may be necessary or proper in the opinion of the Company to vest title to the
Inventions and any Intellectual Property Rights associated with or related to
the Inventions in the Company and to enable it to obtain and maintain the entire
right and title thereto throughout the world, and (b) the Employee shall render
to the Company, at its expense (including a reasonable payment (based on the
Employee's last per diem earnings) for the time involved if the Employee is not
then in the Company's employ or receiving severance payments from the Company
pursuant to Section 8(b)(ii), or if the Employee has not received any severance
payment with respect to such time period), reasonable assistance as it may
require in the prosecution of applications for such Intellectual Property
Rights, in the prosecution or defense of interferences or infringements that may
be declared involving any Intellectual Property Rights, and in any litigation in
which the Company or any of its subsidiaries or other affiliates may be involved
relating to the Inventions or any such Intellectual Property Rights.  If such a
request for assistance occurs after the expiration of the Employment Period,
then the Employee shall be required to render assistance to the Company only to
the extent that the Employee can do so without materially affecting the
Employee's other business obligations to his employer and other third parties.

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     Section 11.    Assistance in Litigation.  At the request and expense of the
                    ------------------------
Company (including a reasonable payment (based on the Employee's last per diem
earnings) for the time involved if the Employee is not then in the Company's
employ or receiving severance payments from the Company pursuant to Section
8(b)(ii), or if the Employee has not received any severance payment with respect
to such time period), and upon reasonable notice, the Employee, at all times
during and after the Employment Period, shall furnish such information and
assistance to the Company and its subsidiaries and other affiliates as they may
reasonably require in connection with any issue, claim or litigation in which
the Company or any such subsidiary or other affiliate may be involved.  If such
a request for assistance occurs after the expiration of the Employment Period,
then the Employee shall be required to render assistance to the Company only to
the extent that the Employee can do so without materially affecting the
Employee's other business obligations to his employer and other third parties.

     Section 12.    Entire Agreement; Amendment and Waiver.  This Agreement
                    --------------------------------------
contains the entire agreement between the Employee and the Company with respect
to the subject matter hereof and supersedes any and all prior and
contemporaneous agreements and understandings between the Employee and the
Company or any predecessor of the Company or any of their respective
subsidiaries or other affiliates regarding the subject matter hereof.  No
waiver, amendment or modification of any provision of this Agreement shall be
effective unless in writing and signed by the Employee and the Company.  The
waiver by either party of a breach of any provision of this Agreement by the
other party shall not operate or be construed as a waiver of any subsequent
breach by such other party.

     Section 13.    Notices.
                    -------

          (a)  All notices or other communications pursuant to this Agreement
shall be in writing and shall be deemed to be sufficient if delivered
personally, telecopied, sent by nationally-recognized, overnight courier, or
mailed by registered or certified mail (return receipt requested), postage
prepaid, to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice):

               (i)  if to the Company, to it at:

                    1340 Treat Boulevard, Suite 200
                    Walnut Creek, California 94596
                    Attention:  Chairman of the Board
                    Telecopier: (925) 979-4215
                    Telephone:  (925) 979-4480

               (ii) if to Pacer, to it at:

                    1340 Treat Boulevard, Suite 200
                    Walnut Creek, California 94596
                    Attention:  Chairman of the Board
                    Telecopier: (925) 979-4215
                    Telephone:  (925) 979-4480

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               (iii) if to the Employee, to him at his last known address
     contained in the records of the Company.

          (b)  All such notices and other communications shall be deemed to have
been given and received (i) in the case of personal delivery, on the date of
such delivery, (ii) in the case of delivery by telecopy, on the date of such
delivery (if sent on a business day, and if not sent on a business day, then on
the next business day after the date sent), (iii) in the case of delivery by
nationally-recognized, overnight courier, on the next business day following
dispatch, and (iv) in the case of mailing, on the third business day following
such mailing.

     Section 14.    Headings.  The section headings in this Agreement are for
                    --------
convenience only and shall not control or affect the meaning of any provision of
this Agreement.

     Section 15.    Severability.  It is the desire and intent of the parties
                    ------------
that the provisions of this Agreement be enforced to the fullest extent
permissible under the law and public policies applied in each jurisdiction in
which enforcement is sought.  Accordingly, in the event that any provision of
this Agreement would be held in any jurisdiction to be invalid, prohibited or
unenforceable for any reason, such provision, as to such jurisdiction, shall be
ineffective, without invalidating the remaining provisions of this Agreement or
affecting the validity or enforceability of such provision in any other
jurisdiction.  Notwithstanding the foregoing, if such provision could be more
narrowly drawn so as not to be invalid, prohibited or unenforceable in such
jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.

     Section 16.    Remedies.  The Employee acknowledges and understands that
                    --------
the provisions of this Agreement are of a special and unique nature, the loss of
which cannot be adequately compensated for in damages by an action at law, and
thus, the breach or threatened breach of the provisions of this Agreement would
cause the Company irreparable harm.  The Employee further acknowledges that in
the event of a breach or any of the covenants contained in Section 9, 10 or 11,
the Company shall be entitled to immediate relief enjoining such violations in
any court or before any judicial body having jurisdiction over such a claim.
All remedies hereunder are cumulative, are in addition to any other remedies
provided for by law and, to the extent permitted by law, may be exercised
concurrently or separately, and the exercise of any one remedy shall not be
deemed to be an election of such remedy or to preclude the exercise of any other
remedy.

     Section 17.    Representation.  The Employee hereby represents and warrants
                    --------------
to the Company that (a) the execution, delivery and performance of this
Agreement by the Employee does not breach, violate or cause a default under any
agreement, contract or instrument to which the Employee is a party or any
judgment, order or decree to which the Employee is subject, and (b) the Employee
is not a party to or bound by any employment agreement, consulting agreement,
noncompete agreement, confidentiality agreement or similar agreement with any
other person or entity.

     Section 18.    Benefits of Agreement; Assignment.  The terms and provisions
                    ---------------------------------
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their

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respective successors, assigns, representatives, heirs and estates, as
applicable. This Agreement shall not be assignable by any party hereto without
the prior written consent of the other parties hereto, except that the Company
may assign this Agreement or its rights hereunder to Pacer, a direct or indirect
wholly-owned subsidiary of Pacer or the Company, or to any person or entity
succeeding to all or any substantial portion of their respective businesses.

     Section 19.    Governing Law.  This Agreement shall be governed by and
                    -------------
construed in accordance with the domestic laws of the State of New York without
giving effect to any choice of law provision or rule (whether of the State of
New York or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of New York.

     Section 20.    Mutual Waiver of Jury Trial.  THE PARTIES WISH THAT
                    ---------------------------
APPLICABLE LAWS APPLY TO THE RESOLUTION OF ANY DISPUTES ARISING UNDER THIS
AGREEMENT AND THE SUBJECT MATTER HEREOF, AND THAT THEIR DISPUTES BE RESOLVED BY
AN EXPERIENCED PERSON APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND APPLICABLE LAWS, THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR
PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS
AGREEMENT OR ANY DOCUMENTS RELATED HERETO.

     Section 21.    Counterparts.  This Agreement may be executed in any number
                    ------------
of counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.

                               *  *  *  *  *  *

                                       10
<PAGE>

          IN WITNESS WHEREOF, the parties have executed and delivered this
Employment Agreement effective as of the date first written above.

                                   THE COMPANY:
                                   -----------

                                   RFI GROUP, INC.

                                   By:/s/ Alan E. Baer
                                      ____________________________
                                   Name: Alan E. Baer
                                        __________________________
                                   Title: Chief Operating Officer
                                          ________________________

                                   THE EMPLOYEE:
                                   ------------

                                   /s/ Alan E. Baer
                                   ____________________________
                                   Alan E. Baer

                                   PACER:
                                   -----

                                   PACER INTERNATIONAL, INC.

                                   By:/s/ LC Yarberry
                                      ____________________________
                                   Name: LC Yarberry
                                         _________________________
                                   Title: Executive Vice President
                                          ________________________

                                       11<PAGE>

                                                                   Exhibit 10.35

                                                  Effective Date: (May 28, 1999)

                            EQUIPMENT USE AGREEMENT

                                    between

                               PAMC LLC ("LLC")

                                      and

                           Pacer International, Inc.
             (formerly known as APL Land Transport Services, Inc.)

          LLC and Pacer International, Inc., a Tennessee corporation with its
principal place of business at 7746 Mt. Diablo Boulevard, Suite 110, Lafayette,
California 94549 ("User"), agree that LLC will provide to User, subject to
availability and upon request of User, chassis and containers (the "Equipment"),
intended for use in connection with the intermodal movement of freight, and User
will accept and use such Equipment on a per diem basis upon the following terms
and conditions:

     1.   User acknowledges that the Equipment being provided by LLC's program
operator (the "Program Operator") on behalf of LLC is provided on a use day
basis with Equipment out of the revolving pools of such equipment the Program
Operator has domiciled in various locations in conjunction with LLC.  Any
location where Equipment is NOT available to User shall be identified in the
                            ---
Schedule to this Agreement.

          User acknowledges that containers, either ISO or Domestic, which are
provided as Equipment by LLC through the Program Operator may have various
alphanumeric prefixes and must be returned to LLC at the locations identified in
the Schedule to this Agreement.

     2.   Receipt of LLC Equipment in good repair and working condition is
acknowledged by User upon acceptance of delivery and/or execution of the
applicable Equipment inspection report ("EIR") by User or User's agent.  Any
third party which receives Equipment on behalf of User shall be deemed to have
authority on behalf of User to execute an EIR.  Any Equipment picked up by or
received by User or a representative of User or coming under the direct or
indirect control of User shall be subject to the terms and conditions of this
agreement.

     3.   Use charges payable by User for each calendar day (including
Saturdays, Sundays and Holidays) during which Equipment is under the control of
User shall commence on the date of pickup by User or its agent or the day
following acceptance from another LLC authorized User and shall continue until
such Equipment is returned to LLC at the required location set forth on the
Schedule attached hereto, or until the equipment is accepted by another
authorized user as provided in the Schedule. Unless otherwise agreed, Equipment
delivered or interchanged to an unauthorized carrier shall remain the
responsibility of the User while such equipment is in the possession or control
of the unauthorized carrier. For the use of the Equipment, User shall pay LLC
the daily use charges set forth on the Schedule attached hereto. Such use
charges are
<PAGE>

subject to change by LLC upon 30 days' notice to User. The specific units of
Equipment covered by this Agreement, the dates of delivery and the dates of
termination shall be set forth on LLC's monthly invoices, which are incorporated
herein by reference.

     4.   Payment Terms. Unless otherwise agreed, User shall be invoiced monthly
for all use, repair and other charges hereunder, and shall pay all such invoices
within thirty (30) days from the invoice date. All payments to LLC shall be made
in U.S. Currency to the address as directed by LLC. Overdue payments may be
increased by a monthly service charge equal to the greater of the maximum rate
permitted by law or 1 1/2% over the then current prime rate of The Chase
Manhattan Bank, N.A., New York, New York.

     5.   User shall, at its sole cost and expense, maintain the minimum amounts
of insurance set forth below and shall promptly furnish LLC with certificates of
such insurance naming LLC as an additional insured and co-insured. The insurance
policies shall be endorsed to provide that they shall not be canceled or allowed
to expire unless LLC receives 20 days' prior written notice. The maintenance of
insurance by User hereunder shall not be deemed or construed to limit or modify
User's obligation hereunder.

          (a)  All Risk Physical Damage Insurance in an amount equal to the
value of all Equipment charged to it while on land, in transit or at rest
anywhere in the world. The insurance shall be endorsed with a Loss Payable
Clause in favor of LLC. Notwithstanding the foregoing, User may be self-insured
if User maintains a net worth of not less than $300 million.

          (b)  Comprehensive General Liability Insurance, including contractual
liability, against claims for bodily injury or death and property damage
including, without limitation, cargo loss, in an amount not less than U.S.
$5,000,000 per occurrence. The insurance shall be endorsed to name LLC as an
Additional Insured.

          (c)  Automobile Liability Insurance against claims for bodily injury
or death and property damage in an amount not less than U.S. $5,000,000 per
occurrence. The insurance shall be endorsed to name LLC as an Additional
Insured.

     6.   Condition of Equipment shall be maintained by User at User's expense
and upon redelivery to LLC or interchange to another LLC authorized user, User
shall return all Equipment in the same condition as when received, normal wear
and tear excepted. All marks of identification or logos applied to the Equipment
by or for User shall be removed and the surface restored at User's expense. In
case of total loss by theft, confiscation, fire, destruction, damage beyond
economic repair, or any other total casualty, User shall pay LLC's Stipulated
Loss Value for such Equipment as set forth in the Schedule. In case of partial
loss or damage to any Equipment, User shall make all necessary repairs and/or
replacements according to LLC's standards. In the alternative, with respect to
any Equipment returned to LLC or interchanged to another LLC authorized user in
a damaged condition, User shall be liable to LLC for the full cost of any such
repairs.

     7.   No assignment by User of any interest in or subletting of any of the
Equipment, or any of its rights or obligations hereunder, shall be permitted
without the prior express written approval of LLC.  Any interchange of the
Equipment picked up by User or its designated

                                       2
<PAGE>

drayman to any party other than a LLC authorized User will not relieve User of
its obligations hereunder until the Equipment is returned to LLC or interchanged
to an LLC authorized User. This Agreement may be assigned by LLC at any time
without the consent of User.

     8.   NO WARRANTY, EXPRESS OR IMPLIED, IS MADE BY LLC AS TO THE QUALITY AS
TO DESIGN OR MANUFACTURE OF THE EQUIPMENT OR AS TO THE MERCHANTABILITY OF
FITNESS FOR ANY PURPOSE THEREOF. User acknowledges that it inspected the
Equipment when received and hereby waives any and all claims against LLC for
damages or injuries to any person or property (inducting cargo loss) from
whatever cause in connection with the use and/or possession of the Equipment by
User, its employees or agents.

     9.   User hereby agrees to defend at its own cost and expense, LLC and hold
LLC, its employees, officers and agents, harmless from and against any and all
loss (including reasonable attorneys fees) to persons whomsoever arising out of
or incident to the use, operation or possession of the Equipment by User, its
employees or agents.

     10.  All laws, rules and regulations, whether governmental or otherwise,
applicable to the use and/or possession of the Equipment by User or User's
agent, shall be complied with by User at User's expense.  User shall not make,
suffer or permit any unlawful use of the Equipment.  User shall not use
Equipment for storage or transportation of hazardous wastes, unprotected
corrosive substances, high density poorly-secured materials, or bulk commodities
which may corrode, oxidize, severely dent, puncture, contaminate, stain or
damage the Equipment, or make any other use of the Equipment which would result
in damage.

     11.  All taxes, assessments, penalties or other charges arising out of or
incident to the use and/or possession of the Equipment by User or User's agent
prior to its return to LLC shall be the responsibility of User.

     12.  Upon breach by User of the terms and conditions under which the
Equipment may be used hereunder, upon cancellation of any guarantee of User's
obligations hereunder upon breach by User of any term or condition of any other
agreement with LLC, or of any agreement between User and any Member of LLC or
upon the bankruptcy or insolvency of User, LLC shall have the right, without
prejudice to any other rights or remedies available hereunder, at law or in
equity, to terminate this Agreement (whereupon the terms and conditions of the
Agreement shall continue to apply to all Equipment then under the control of
User until its redelivery) and/or demand the immediate return of the Equipment
as provided herein and/or immediately retake possession of the Equipment, and
any damages occasioned by such taking of possession are hereby specifically
waived by User. User shall assist LLC in any return and repossession effort and
shall be liable for all reasonable expenses therefore, including attorneys'
fees, as well as for all unpaid use charges, all necessary Equipment repair or
replacement expenses and any other damages to LLC due to User's breach.

     13.  No waiver by LLC of any breach or default hereunder, or commission or
delay by LLC in exercising any of its rights hereunder, or course of dealing
between LLC and User shall operate as a waiver by LLC to subsequently require
full compliance with this Agreement or as a waiver of any of LLC's rights or
remedies hereunder.

                                       3
<PAGE>

     14.  Written notices and other communications required to be given
hereunder, including those required for billing purposes, may be sent, unless
otherwise specifically provided, by telex or delivered by mail, postage prepaid,
to the addresses set forth herein. All notices to LLC shall be addressed to LLC,
100 Manhattanville Road, Purchase, New York 10577-2135, Attention: Manager. All
notices to User shall be addressed to the address indicated on the signature
page hereto. Notice will be deemed effective upon receipt. Any change of address
by either party shall be communicated to the other by notice given as provided
herein.

     15.  Unless otherwise provided in the Schedule hereto, or in any other
written agreement of the parties, either party may terminate this Agreement upon
seven (7) days' written notice to the other. Upon notice of termination, User
shall promptly deliver all Equipment in its possession or subject to this
Agreement to the locations designated by LLC.

     16.  The terms and conditions of this Agreement shall remain in effect
until all Equipment is returned to and accepted by LLC and until User satisfies
its obligations in full under this Agreement.

     17.  This Agreement shall become effective upon its acceptance and
execution by LLC.

     18.  LLC and User hereby agree that any claim or controversy, directly or
indirectly arising out of or relating to this agreement, may be litigated in the
state or federal courts located in the State of New York, and LLC and User
hereby consent to be subject to the jurisdiction of such courts.  LLC and User
agree that service of process upon the other may be made by mailing a copy (by
registered or certified mail) postage prepaid, addressed to the respondent at
the address shown above.  Service shall be complete seven days after such
process has been mailed to the respondent.  Nothing herein shall affect the
right of either party to serve legal process in any other manner permitted by
law or affect the right of either party to bring any action or proceeding
against the other party or its property in the courts of any other jurisdiction.
This agreement shall be governed by the laws of the State of New York.

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by an officer hereunto duly authorized, as of the Effective Date set
forth above, each pursuant to due corporate authority.

PAMC LLC                               PACER INTERNATIONAL, INC.

By:/s/ Alan Messing                    By:/s/ Donald C. Orris
   ---------------------------            --------------------------

Title:                                 Title: Chairman, Chief Executive
      -------------------------              ----------------------
                                              Officer and President
Date: 05/27/99                         Date:
     ----------------------                 -----------------------

Address:

                                       4

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