Questions Re Shipping by Rail

 
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LsFarm
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Post by LsFarm » Wed. Feb. 13, 2008 8:27 am

I would highly recommend making it a joint venture, that is have at least half if not more sold ahead of time, WITH deposits. Significant deposits... The other issue that you haven't mentioned, unless I missed it, is that you need to weigh the coal as you sell it. You will need to get an accurate scale for your customers to drive over in and out of the yard..

With at least half the railcar sold ahead of time, you might be able to cover your costs on the second year..

I'd check with trucking companies.. My 29 ton load of coal cost a lot less because I found a trucker who had a backhaul... He only went about an hour out of his way to drop off the coal, then went back and picked up a load going back east. He carried a load both ways instead of only one way.

I haven't been in touch with him for a second load, so I don't know how much his rates have gone up since the fuel has gone up about $.80 since his last delivery.

I'll be real interested to find out how much a railcar of coal costs to ship a 100 ton load.. I have a big rail yard nearby that has 15 or so sidings, and handles sand/gravel. It used to be a coal yard.. I could find out what they would charge to unload a railcar.. But I would never commit to 100 tons without at least 1/2 of it pre-sold... I don't see that much money in it to make it worthwhile... $50/ton in my pocket is not enough to keep a truck on the road, a tractor ready, and answer the phone, make/keep appointments... put up with questions about the scale's accuracy etc.

The fairly local coal retailers near me are dispensing coal from their farms, so they are 'home', and they are barely making $50/ton... Not really worth it unless you sold stoves and accessories as well.

Just my $.02 worth...

Greg L.\\

.

 
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Wardner
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Post by Wardner » Wed. Feb. 13, 2008 4:04 pm

Thanks for the comments Greg.

I see a joint venture as being labor intensive. Not my cup of tea. Each load has to be organized. I suppose a website updated frequently and furnished with a Paypal link would reduce the communication component. Nonetheless, each trip becomes a separate JV. In this arrangement, the hopper would have to be rented in order to close out and balance the books. There is a high likelihood that most of the coal would have to be handled twice. This makes me a coal yard operator. Not good. Lots of unneeded overhead and labor.

A Co-op would allow a continuing operation. Shares, based on an individual's expected tonnage, would be sold to buy the capital equipment. Those shares could be re-sold if the coal user wanted out. There would have to be additional assessments to cover coal, maintenance, rentals, and management costs. This is too complicated and probably has little buyer appeal.

I think this should be handled as a for-profit business with growth as a key component. Teaming up with a mass merchandiser such as Home Depot could be very advantageous. They have the foot traffic and exposure. Most importantly, they have the personnel to run the operation. Moreover, they have the floor space to sell stoves which is a vital component to the growth I talked about. There is no way that I want to sell stoves and maintain a showroom. I could be induced to install them.

I mentioned weighing in a previous post. Load cells are cheap. eBay currently has a 5000lb load-cell digital read-out dynamometer for less than $400. A printer can be added for $200. It has memory and can cuumutively add each load. There are tipping dumpsters, low profile drive-ons, and trailer set-ups similarly configured. I would rather sell by weight than volume. It allows one to check the vehicle GVW and avoid the liability of overloads.

All this may be just a pipe dream. I need to put together a proposal and talk to the manager and regional manager of my local Home Depot. It may come to pass that there isn't any money even with one hopper per month. I do think it is important to undersell the local competition in order to build sales for the coal and spur stove sales for HD.

Getting back to Richards's comment about freezing small coal. Solutions could take several paths. A thermostatically controlled heat trace circuit covered with spray foam would work. It might be better to get 50ea 275 gal totes and fill them. They can be stacked four high and not take much space inside. The easiest solution would be pallets of 40 lb bags and charge a premium price in winter so that the customers buy their coal in the favorable weather. It is easy but requires a boxcar.

 
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coal berner
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Post by coal berner » Wed. Feb. 13, 2008 6:51 pm

Yanche wrote:
Wardner wrote:OK, here is my plan. I haven't priced out anything so I am just guessing at the numbers. SNIP ...

Yanche mentioned Home Depot and that is something I have considered. I might be able to get my local HD to install a siding next to the Garden Shop. Two-way tracks run behind the building. If that was the case, I would have them sell the bulk coal on shares. I might even get a boxcar for in-store pallet sales. This would allow them to beef up their coal stove line. I would get factory training from their supplier and do the installations. If it worked out, there might be other HD locations that would be suitable. SNIP ....
I'm not suggesting you try to get Home Depot to be a retail outlet. It's very unlikely you would have much influence with Home Depot or any other large retailer. My suggestion was to use a home center delivery contractor to make deliveries of bagged coal. It will be much easier find an existing rail siding that can handle pallets of coal bags than one than can unload and re-load bulk coal. It will also be easier to find retail customers when you can promise home delivery of bagged coal. That's where the Home Depot independent delivery contractor comes in.

Bagging coal can not be as expensive as it appears to be based on retail sale prices. There must be coal bagging services in NEPA. Compared to bulk coal, bagged coal would allow you to get started without having to invest in capital equipment. You could just be the middle man, renting a rail car, etc. In my opinion unless you have some very good contacts, pulling off bulk coal sales will be very difficult at best and more likely impossible.
Trust me John There is Nun If there was I would be buying it You know where I live
I am with in 8 miles of the Two Biggest Coal Bagging companies And I Pay the same as the People out of State 5.50 for a 40lb from one co. and 6.75 for a 40lb bag from the other And the third co. is 30 miles away and it is 5.75 a bag It cost a lot more to bag coal then it does to sell it loose much more costly for bagging equipment Bags printing manpower Fuel and so on when the coal comes out of the mine all they have to do is take it to the breaker size clean it and sell it when bagging coal it comes from the mine to the breaker size cleaned and then trucked to the bagging Plant dump then that same coal has to picked back up loaded into the bagging hoopers then you need a few guys to operate the bagger the bag sealer the scale load it on Pallets wrap it load it on the trucks and deliver it loose coal is always there in the chute ready to fill the trucks or on a pile ready For the same Price for a 40lb bag of coal I can buy 100lbs loose
So Bulk loose will always be cheaper :) If it changes I will let you know ;)


 
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Post by coal berner » Wed. Feb. 13, 2008 6:57 pm

LsFarm wrote:I would highly recommend making it a joint venture, that is have at least half if not more sold ahead of time, WITH deposits. Significant deposits... The other issue that you haven't mentioned, unless I missed it, is that you need to weigh the coal as you sell it. You will need to get an accurate scale for your customers to drive over in and out of the yard..

With at least half the railcar sold ahead of time, you might be able to cover your costs on the second year..

I'd check with trucking companies.. My 29 ton load of coal cost a lot less because I found a trucker who had a backhaul... He only went about an hour out of his way to drop off the coal, then went back and picked up a load going back east. He carried a load both ways instead of only one way.

I haven't been in touch with him for a second load, so I don't know how much his rates have gone up since the fuel has gone up about $.80 since his last delivery.

I'll be real interested to find out how much a railcar of coal costs to ship a 100 ton load.. I have a big rail yard nearby that has 15 or so sidings, and handles sand/gravel. It used to be a coal yard.. I could find out what they would charge to unload a railcar.. But I would never commit to 100 tons without at least 1/2 of it pre-sold... I don't see that much money in it to make it worthwhile... $50/ton in my pocket is not enough to keep a truck on the road, a tractor ready, and answer the phone, make/keep appointments... put up with questions about the scale's accuracy etc.

The fairly local coal retailers near me are dispensing coal from their farms, so they are 'home', and they are barely making $50/ton... Not really worth it unless you sold stoves and accessories as well.

Just my $.02 worth...

Greg L.\\

.
Hi Greg I believe the price was a 1.59.9 for fuel down here when you got the 29.5 tons last July or Aug So now it is 3.59.9 so thats like 2.00 in the fuel Price Like I stated in one of my post on here Most tri axle drivers are charging 65 to 75 $ Per ton for out of state When you got you load it was 46 to 54 $ Per ton ;)

 
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Post by LsFarm » Wed. Feb. 13, 2008 8:06 pm

Hi Jay, fuel was $2.39 when I bought my load, I had just been east a month or so before to pick up the AA boiler., Diesel hasn't been under $2.00 for a lot more than a year.. I should look through some reciepts and find one, just for kicks.. :D .

I think he was charging half of his normal price 'cause he back loaded from here back to Pa... I need to call him and set up a load in the spring... want to run an 18 wheeler through the Skukyll County Five Hundred ?? :lol: :) :D :?

Greg L.

 
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Post by e.alleg » Wed. Feb. 13, 2008 10:06 pm

HD does have reselling agreements in their stores. I believe the entire nut and bolt dept in many of their stores is maintained and owned by others. HD runs the product through their cash registers and takes a cut. I'll bet there are a dozen such agreements in each store.
at least 90% is pay by scan, maybe more, meaning that companies put their product on HD's shelves and then they get paid when they their product goes through the checkout line. The live plants are like that, the hardware, plumbing, electrical, just about everything. That is why Home Depot has never closed a store, they have zero inventory so it doesn't cost anything to sit on merchandise. No problem with returns either, the supplier eats that. Nice, huh? As far as scales go, if you plan on selling by weight there is no question on accuracy, the state makes sure of that. They dictate how your scales are set up and calibrated, and are sticklers to the rules.


 
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Post by coal berner » Wed. Feb. 13, 2008 10:14 pm

LsFarm wrote:Hi Jay, fuel was $2.39 when I bought my load, I had just been east a month or so before to pick up the AA boiler., Diesel hasn't been under $2.00 for a lot more than a year.. I should look through some reciepts and find one, just for kicks.. :D .

I think he was charging half of his normal price 'cause he back loaded from here back to Pa... I need to call him and set up a load in the spring... want to run an 18 wheeler through the Skukyll County Five Hundred ?? :lol: :) :D :?

Greg L.
Yea you are correct it was 2.59.9 not 159.9 it is now 3.39.9 When was the load delivered July Or Aug You Were Down in June 8th 9th left the 10th The A-A- was on E-bay the 11th we picked it up I think the 18th we talked about getting you a load shipped to you so I think it was 3 or 4 weeks later Am I close :)

 
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Post by Richard S. » Wed. Feb. 13, 2008 10:33 pm

e.alleg wrote:[if you plan on selling by weight there is no question on accuracy, the state makes sure of that. They dictate how your scales are set up and calibrated, and are sticklers to the rules.
In Pennsylvania you can only sell it by weight from a certified scale which is checked by the state about once every 6 months. At one point the breaker I was getting coal from would sell 5 gallon buckets for $2, about 40lbs but the state put a stop to that. Only one losing out was the guy who wanted to get few buckets for the weekend. The person doing the weighing needs to be a certified Weightmaster, this is not a big deal to get this certification. The Weightmaster issues you a numbered wieghtslip that has to contain the following information:
  • Address of the scale
  • Date
  • Time
  • License number on the truck/trailer
  • Size of coal
  • Dealers name and address
  • Name and address of the customer
  • Weigtmasters signature and lic. number
  • Tare
  • Net
  • Gross
There's four copies, a yellow one for the office, a pink copy that has to be kept at the scale for what I think is 3 years, the dealer gets a blue copy and the customer gets the original white copy either printed or written in ink.

 
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Post by japar » Thu. Feb. 21, 2008 8:54 pm

I think timing and being at the right place at the right time is everything. This is my first year burning coal and in the last 6 weeks only used 25 gals of oil. I was looking for a wood stove but end up with a wood / coal insert by chance a timing thing and now I am a coal junkie. I turned on a buddy who has been cutting up pallets to burn in his insert. I told him to look for a coal stove and he started describing his stove ,it has a ash pan , shaker grates and bottom door. I said hey thats a coal/wood insert, gave him a bag of Blaschak he burned all nite for the first time ran home at lunch and the thing is still glowing red he was totally stoked, He said you don't know how much work this is going to save me , where can I get more of that black gold. My dad who just turned 80 said he burned coal way back could never get that dammed *censored* to burn right then he got oil and it saved the day. Now oil $3 gal , $300-$400 a month to keep warm I told him I will show you how to burn coal, there is 1 thing I got that you didn't have and thats the internet. Tewksbury is not far from me. Good Luck

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