Questions Re Shipping by Rail

 
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Post by Wardner » Tue. Feb. 12, 2008 3:32 pm

I am 300 miles from NEPA. On occasion, I have passed through the area on the Interstates but have never actually seen a coal mine or breaker. I am thinking that shipping coal by rail has to be cheaper than by truck.

There are countless unused rail sidings in my area. Some are even in abandoned coal yards. I am near Lowell, MA and I'll bet there were at least 20 trackside coal dealers at one time. I am 63 years old and can remember a few of them.

Twenty miles from here is an antique stove shop located in an old RR passenger depot. It has a siding and several boxcars that are used for stove parts storage.

I need some info on the loading end of the coal shipment. I hope someone can answer some of the following questions.

1. Are sidings common at breakers?

2. Are sidings common at mines?

3. Are the chutes, silos, conveyors, tracks, etc still operational?

4. How much Antracite is shipped by rail today?

5. Who weighs the load? The loading facility or railroad (or both)? Is it likely that weight is now calculated by volume or carload?

6. Do all breakers have at least 3 sizes of coal?

7. Are discounts available for purchases in the 75-100 ton quantities?

8. Does anyone think I am nuts?


 
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Post by coalstoves » Tue. Feb. 12, 2008 4:33 pm

Wardner wrote: I need some info on the loading end of the coal shipment. I hope someone can answer some of the following questions.

1. Are sidings common at breakers? Historically Always, Now a days No, But a few do

2. Are sidings common at mines? Not anymore

3. Are the chutes, silos, conveyors, tracks, etc still operational? 1 or 2

4. How much Antracite is shipped by rail today? Unknow to most, for home heating maybe a tenth of a percent

5. Who weighs the load? The loading facility or railroad (or both)? Is it likely that weight is now calculated by volume or carload? Carload

6. Do all breakers have at least 3 sizes of coal? Yup

7. Are discounts available for purchases in the 75-100 ton quantities? Of Course Dealer and delivery agents recieve discounts like any other business

8. Does anyone think I am nuts? Not Nuts but I don't see where your going with it .

 
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Post by Yanche » Tue. Feb. 12, 2008 5:15 pm

You will be able to get coal shipped by rail. I had JC ask if Superior could ship by rail. The answer was yes. In Superior's case coal would be trucked to the rail siding. I would think coal would be weighed by the truck load at the breaker to determine how much to load. You will need to contact a railroad short line that operates where you want delivery. They will have all the contacts, coal sales agents, coal hopper car rental prices, etc. The short line in my area (Maryland Midland Railway) is run by a bunch of really nice guys, they haul grain for farmers, bulk stone, plus a lot of Portland cement for Lehigh Cement. Rail will be the cheapest way to move coal per mile traveled. The railroads own the right of way and are not paying road tolls, etc. Your research on the fixed costs will determine if it's any cost savings.

Look for companies in your area that deal with bulk cargo like stone. They will have the equipment to unload and stock pile coal. Consider buying bagged coal loaded on pallets and hauled in railroad box cars. There will be a lot more existing rail facilities that can deal with this kind of cargo than with bulk loose coal. Make a deal with the local Home Depot or Lowe's delivery guy. They are independent contractors that have the flat bed trucks with forklifts. Perhaps some are interesting in moonlighting. Good luck. Looks like a business opportunity. How about a buyer's cooperative?

 
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Post by coaledsweat » Tue. Feb. 12, 2008 6:15 pm

The problem with sidings is there is an annual maintenance fee based on the length of the siding. If you stop paying that fee and a year or so goes by and you want to use the siding they will have to have their team of experts inspect everything and freshen up what is worn rotted or loose. That fee is a minimum $50,000 and then it could be more on top of it. I worked at a paper mill in New Haven that had a siding about 200' and it cost about $2000 (I think it was a minimum) a year for the maintenance fee. The boss let the fee go at a time when trucking was dirt cheap. He went to re-up and he was ready to kill himself, everything there was junk but the rails and had to be replaced. As long as the fee is paid up, its the railroads problem.

 
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Post by coal berner » Tue. Feb. 12, 2008 7:32 pm

You would have to call Blue Mountain & Reading R&R first then call Superior coal co. or Summit Anthracite
there Breaker is Right at where they load the cars on RT 125 Donaldson PA Superior is 4.5 miles down the road If you Pm me I will give the Names and Numbers of the Persons you need to talk to also I hope you have lots of room down there 1 Rail car will hold 100 tons of coal loose Bulk also they will weigh it at the breaker they will use Tri- Axel to load the coal back up the ramp and dump in the car about 4 Tri -Axel will fill one car Baged coal will be double The Price of Bulk you are looking at 140.000 in coal for one car I am sure the R&R will have min limit on how many cars before They will Haul it Plus fuel for the train I am not sure what the MPG is on a train but I can guess it is not good fuel right now up here is 3.39.9 Per Gal Plus you will have a Transportation Fee From the R&R I am sure that will not be cheap I know some Tri - Axel Drivers are charging 75 to 85 Per ton with a 20 ton Min out of state so I think the Train will be more Anyway I can Give you info Just PM me

 
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Post by e.alleg » Tue. Feb. 12, 2008 8:31 pm

might be cheaper to rent one of those helicopters that transports tanks and have that deliver your hopper car full of coal. 50k to fix a siding holy smokes how much do railroad ties cost?

 
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Post by coaledsweat » Tue. Feb. 12, 2008 8:46 pm

No the $50K was to do the inspection and reopen the siding to traffic (the vig if you will), the cost of the repairs would be factored into your new yearly rate I think.


 
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Post by Wardner » Tue. Feb. 12, 2008 9:03 pm

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

I would like to buy an obsolete covered hopper (think portland cement car) but might have to settle for an open one. Obsolete might mean a car that is smaller than customary to a shipper that is upgrading his rolling stock. Let's say around 90-100 tons. Covered would mean having to load via a chute. Covered would also eliminate icing problems. I am hoping that a car could be purchased for something slightly over scrap price, maybe $5000-$6000.

I want to own the car so that unloading is a one-step transfer to the retail customer's truck. Stockpiling is messy, takes space, and requires a dedicated tractor/loader. The piles are also subject to shrinkage and icing.

Equipment at the siding would be limited to a conveyor and a load-cell trailer scale. Cost on those items would total around 55000. I have priced them on eBay. Both items would require additional adaptations that I would make in my shop.

Other expenses would be siding rental, freight charges, and car maintenance. I don't have any numbers to plug in there. The selling of coal would be restricted to one weeknight and Saturday morning. I would offer truck delivery anytime for an extra charge,

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.

As for a cooperative, it seems like too much paperwork, selling shares, and people problems to seriously consider such a venture. I can see the lawyers and accountants controlling everything and driving us all out of the quagmire they created. I want to keep it simple and fun.

There are some potential problems that worry me.

1. Not able to get favorable pricing from the breaker because rail facilities are limited in NEPA.

2. Stuck with a bad load of coal that ruins my reputation.

3. Scale fraud from breaker.

4. Unwarranted car condemnation by RR so that they will not move it or force me into expensive repairs for bearings, wheels, brakes, hoses, etc.

I think alternative fuels are coming and this could be a growth business. In light of this consideration, I would like to keep costs low and pass them on to the consumer. I would be aiming for a $50/ton reduction from the local market.

 
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Post by Pacowy » Tue. Feb. 12, 2008 10:42 pm

Your overall plan makes some sense, but I've got concerns about some of the details. One of the problems may be trying to do this in-season. The moisture in the coal will tend to freeze, especially given the time it can take to move a single rail car. By the time it gets to Lowell, it may take some heroic measures to get the coal to flow the way you're assuming.

The idea of using an old railcar is appealing, but the rr's have to enforce car quality standards or else their mainlines will get clogged up with broken-down trains. Bad rolling stock can also damage the infrastructure in all kinds of ways.

To stay open, you would need more than 1 car, since it takes a fair amount of time for the empties to cycle through the Class I network to the shortlines that serve the mines, get reloaded, and get moved back.

I'd try to avoid construction of any new sidings. You could be looking at something like $250+ per linear foot, assuming no major earthwork.

If this was presented to Home Depot, I'd expect them to come back 60 days later with shipping containers full of bagged Chinese anthracite that they'd sell for the first 4 years at $1.75/50lb. bag.

To me, the concept would work best if you could subscribe a bunch of coal users to take delivery of shares of a carload during the summer. You could pay a little to use a rr-owned car and a bulk transloading facility, and would save extra from low summer mine prices.

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

I would like to buy an obsolete covered hopper (think portland cement car) but might have to settle for an open one. Obsolete might mean a car that is smaller than customary to a shipper that is upgrading his rolling stock. Let's say around 90-100 tons. Covered would mean having to load via a chute. Covered would also eliminate icing problems. I am hoping that a car could be purchased for something slightly over scrap price, maybe $5000-$6000.

I want to own the car so that unloading is a one-step transfer to the retail customer's truck. Stockpiling is messy, takes space, and requires a dedicated tractor/loader. The piles are also subject to shrinkage and icing.

Equipment at the siding would be limited to a conveyor and a load-cell trailer scale. Cost on those items would total around 55000. I have priced them on eBay. Both items would require additional adaptations that I would make in my shop.

Other expenses would be siding rental, freight charges, and car maintenance. I don't have any numbers to plug in there. The selling of coal would be restricted to one weeknight and Saturday morning. I would offer truck delivery anytime for an extra charge,

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.

As for a cooperative, it seems like too much paperwork, selling shares, and people problems to seriously consider such a venture. I can see the lawyers and accountants controlling everything and driving us all out of the quagmire they created. I want to keep it simple and fun.

There are some potential problems that worry me.

1. Not able to get favorable pricing from the breaker because rail facilities are limited in NEPA.

2. Stuck with a bad load of coal that ruins my reputation.

3. Scale fraud from breaker.

4. Unwarranted car condemnation by RR so that they will not move it or force me into expensive repairs for bearings, wheels, brakes, hoses, etc.

I think alternative fuels are coming and this could be a growth business. In light of this consideration, I would like to keep costs low and pass them on to the consumer. I would be aiming for a $50/ton reduction from the local market.

 
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Post by coalstoves » Tue. Feb. 12, 2008 10:58 pm

Your operation will be small by industry standards and you will have a relatively small customer base that is seasonal and will constantly look for a different supplier to beat your prices .

Trucking is how you would do it then build it up if it works that’s how Wal Mart, Lowes, and Home Depot do it follow their lead

 
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Post by Yanche » Tue. Feb. 12, 2008 11:20 pm

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.

 
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Post by Wardner » Tue. Feb. 12, 2008 11:42 pm

Thanks for the response, Pacowy. I need all the advice I can get.

I am not the least bit interested in constructing a siding and buying the industrial land under it. I am retired and don't want a huge mortage. It is quite likely that the whole concept would become uneconomic in that circumstance. I have already spotted a good siding about a mile away.

On the other hand, HD might be willing to put in the siding. They may be facing trucking costs that would make such a facility worthwhile. The HD in Tewksbury has land to erect a storage building that could serve as a regional depot for rail delivered lumber and other bulky product.

As for Chinese coal, I read recently that exports have been shut off. I am not even sure they have Anthracite. The Western Hemisphere only has three sources of hard coal. I assume it is limited in Asia as well. I know that we export US and Canadian thermal coal to them. It is shipped out of Vancouver and one other port on the West Coast

As for freezing coal, that is a good point. I should fill a 55 gallon perforated barrel and see what happens in this weather. I probably should buy some rice coal as that will be most likely to cause problems. I only have stove coal for my hand fed heaters.

Ideally, it would be better to have two cars and set them up on a shuttle schedule. If I were to use a rental siding, I could get started with one car. I have 100 tons of elevated silos left over from my days as a sandblasting contractor. The last third of the hopper contents could be transferred prior to sending the car back to NEPA. If I were to enter into a deal with HD, I think it would be necessary to get two hoppers. Heck, maybe more. Who knows?

Running a co-op requires selling shares to purchase equipment and pay operating costs. It also takes alot of mutual trust so that no one feels taken advantage of. The paperwork has to be meticulous. I have always been self-employed and my limited people skills would be overwhelmed.

 
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Post by Pacowy » Wed. Feb. 13, 2008 12:25 am

I put in two posts earlier but somehow they didn't take. I really do think there's a lot to be said for your proposal. I live near Pittsfield, MA and from time to time I've thought about trying to do something similar. Lowell is further from PA, and makes the numbers work better if you can find the volume.

The points I tried to make in the missing posts are as follows:

1. There are at least 20 rail sidings where you could load anthracite in PA. Most are served by shortlines, but can ship to the national rail network. There's a good listing on the Norfolk Southern website.

2. The railroads will take single car shipments - the rates will be higher than they would be for larger shipments.

3. Rail is much more fuel-efficient and much less labor-intensive than truck. For 300-400 mile shipments of bulk materials, it can be very cost-effective.

4. I think coal dealers have moved away from rail largely due to scale and reliability issues, and not due to rates. Most dealers outside PA serve fairly small markets, and would rather put up $4 grand to get 24 tons into inventory when it's needed rather than pony up $13 grand for 100 tons that might arrive this afternoon or 10 days from now, and have to be carried for a while to sell.

Especially with high diesel prices, your rail idea has many good economic characteristics, but the volume and reliability issues need careful consideration. I don't think you necessarily need a formal co-op, but preselling one way or another seems like it would help.

Mike
Wardner wrote:Thanks for the response, Pacowy. I need all the advice I can get.

I am not the least bit interested in constructing a siding and buying the industrial land under it. I am retired and don't want a huge mortage. It is quite likely that the whole concept would become uneconomic in that circumstance. I have already spotted a good siding about a mile away.

On the other hand, HD might be willing to put in the siding. They may be facing trucking costs that would make such a facility worthwhile. The HD in Tewksbury has land to erect a storage building that could serve as a regional depot for rail delivered lumber and other bulky product.

As for Chinese coal, I read recently that exports have been shut off. I am not even sure they have Anthracite. The Western Hemisphere only has three sources of hard coal. I assume it is limited in Asia as well. I know that we export US and Canadian thermal coal to them. It is shipped out of Vancouver and one other port on the West Coast

As for freezing coal, that is a good point. I should fill a 55 gallon perforated barrel and see what happens in this weather. I probably should buy some rice coal as that will be most likely to cause problems. I only have stove coal for my hand fed heaters.

Ideally, it would be better to have two cars and set them up on a shuttle schedule. If I were to use a rental siding, I could get started with one car. I have 100 tons of elevated silos left over from my days as a sandblasting contractor. The last third of the hopper contents could be transferred prior to sending the car back to NEPA. If I were to enter into a deal with HD, I think it would be necessary to get two hoppers. Heck, maybe more. Who knows?

Running a co-op requires selling shares to purchase equipment and pay operating costs. It also takes alot of mutual trust so that no one feels taken advantage of. The paperwork has to be meticulous. I have always been self-employed and my limited people skills would be overwhelmed.

 
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Post by Wardner » Wed. Feb. 13, 2008 12:50 am

Yanche,

I am trying to reduce costs to a minimum. I see that people who are willing to burn coal are also willing to add some sweat equity to the purchase. Hiring a HD flatbed and forklift doesn't seem to fit into that scenario. Anyway, they don't have anything more than I already have. I own a ten wheel IH truck, two forklifts, and a forklift trailer. My 4000 lb forklift fits nicely on the trailer. The truck also has cherry picker good for two tons. I also have two tractor/loaders.

The only deliveries I would make would be bulk coal. They would be full loads on the truck shown in my avatar. I am not interested in putting my big equipment back on the road. It is too expensive to register, insure, fuel, and maintain. I would be in the same league as the guy 15 miles away who gets $300/ton. He is lucky to sell 100 ton/year. That would be about 20 customers. Why bother? I am looking for simplicity here, not something that looks like a job..

Everybody in suburbia has a neighbor, relative, or buddy with a pickup. This is what makes HD work. Everybody does "cash and carry". The Ford pickup is the largest selling vehicle in the country and has been for many years. The HD trucks are mostly used by contractors who find it cost effective to hire out the shipping in lieu of doing it themselves.

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.

Bagging is expensive. I mentioned I was in the sandblasting business. I saved about 40% buying sand in bulk and using 4, 7, and 20 ton blasting pots. It usually takes about three guys to run a bagging line and then you need a warehouse to store the product. It is hard work and the crew has to be rotated every so often. It takes quite a while to load, bind, and tarp the load on a trailer.

 
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Post by Richard S. » Wed. Feb. 13, 2008 12:52 am

As for the freezing a 55 gallon drum isn''t going to tell you anything, that will nearly freeze solid overnight in weather like this. How hard it is to get it out depends, in weather like this for rice or buck forget it until spring unless you have heat. Nut "might" work, the cleaner it is the better. Rice coal will freeze solid as brick a half foot thick going 5 miles down the road in weather like this. I took one load once, and I'll emphasize once, about 40 miles and about 1/3 of it came out. It was big tunnel from front to back and that was buck coal. If it's really clean its much less of hassle.

If you got it in the spring/mid-summer or even later summer you shouldn't have any troubles. It will dry out by then assuming you have drainage and can vent it. You will need a covering, no doubt about it.

As far as getting ripped off I wouldn't be too concerned about that however its certainly possible. More likely to "fall off" the train in transit would be my guess. I know if you're getting it trucked that's the most likely place you'll "lose" some.


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