Today, for the second time this month, I’ve been by the Worthing, S.D. fertilizer loop(?) It’s a big cirle railroad spur off the BNSF, that allows unloading of unit fertilizer trains into a big storage facility. Both times, they were unloading trains of about 40 cars loaded with BIG, blue pvc pipe for a major water pipline in our area. The unloading proceedure was somewhat crude. A tracked excavation type machine on crawlers had a pincher to unload the flatcars, and load the pipe onto flatbed trucks.
How do the parties involved, line up a move like this? Does the shipper look for places to unload and call up the fertilizer plant? Is it the receivers baby? Does the railroad act as a middle man? How is the cost to use the siding determined?
There’s several different pathways for a rail shipment like this to happen, and which one it uses is highly circumstantial. The usual pathway used by small- to medium-size projects starts with the pipeline contractor being made responsible for logistics by his contract. All the municipality or gas pipeline company or whatever cares about is getting a working pipeline that meets specs; “means and methods” are specifically left to the contractor in order to get the best price as well as to lay off liability onto the contractor (if you specifiy means and methods, and you make a mistake, you accept the risk).
During the bidding process, the contractor calls pipe suppliers for pricing, which are usually FOB works. Usually there will be some informal discussion about shipping arrangements and terms; the pipe suppliers have to know something about transportation costs in order to know if they’ll be competitive on the bid. The pipe suppliers probably ship quite a bit by rail, but they’re not going to run around some other state in the middle of winter looking for a place to unload. The pipe supplier will call his railroad marketing department contact, explain the problem (“I need a site to deliver pipe to in Outer Freezistan”) and the marketing department person will contact the railroad’s Industrial Development or Economic Development officer for that territory, and explain the problem (“Do you know of any sites in Freezistan?”) The ID or ED officer will have at their fingertips a list of good prospects in the area, and give these to the marketing person who in turn gives them to the shipper, or the ID or ED person directly contacts the shipper or contractor. A site visit is set up between the railroad and the contractor, and probably a third-party logistics expert working for the contractor, and possibly a representative of the project’s owner or program manager to see if this is viable and won’t cause the project to go
Who would typically negotiate the price for using someone’s rail siding? How do they figure out the worth of such a rental?
I can picture some farmers from the board at the fertilizer facility kicking stones around and wondering what to say. “Gee, I don’t don’t know what to charge. No one’s ever asked that before. How 'bout a hundred bucks and a dozen donuts?”
I hope that the folks in South Freezistan caught the part about having to negotiate a lease for use of the track with the track owner. The fun thing called an Elkins Act (now somewhat de-horned from its original form) come into play. Shortlines are known to bend the rules, but the big-uns will get obsessive over compliance with this rule that basically is in place to level the playing field and minimize special favors by keeping things equal between a railroad and its shippers.
There would be several other items which may be involved: Will this transloading affect the track owner’s ongoing operations; will it be necessary to clean up and restore the property after use by those who may not take as much care as the owner; will the temporary occupier have adequate insurance coverage, and perhaps more.
In today’s world nothing is simple, especially with tort lawyers behind every tree.
For example, I’m doing some occaisional logistics work on a project that was first sketched out when I was 12 years old, and 40 years later is still at least six years away from dirt being turned. At times in the past few months there have been more than 100 people working solely on logistics planning and costing for this project.
Hi RWM, would that be the “new” Hudson River tunnels? As those of us who don’t know try to figure out whom you work for. [swg]
That’s where the third-party logistics expert comes in. He’ll advise the shipper or receiver what it’s worth based on alternatives, such as a regular transload, a team track, or even building a one-time use spur. If the owner of the facility thinks otherwise, the expert will just show them what their competition is charging. The owner of the facility, if he’s smart, and it’s a pretty big move, will hire his own expert who will do his own alternative calculations, and tell them what it’s worth. Generally what you do is figure the rail rate to the nearest regular transload, the transload cost, and the drayage cost, and see if you can beat it.
None of this stuff is rocket science, just work and thinking clearly. Where people goof up is they think they are experts at things they’ve never done before and never will do again, try to do it all themselves, and either the deal is never consummated because everyone else gets frustrated with them, the price is too high and a competitor with brains wins it, or the deal is too low and they can’t cover their costs or leave lots of $$$ on the table.
Oh, to add to Mud’s and diningcar’s comments: Your typical industry industrial track agreement spells out what you can use the track for, what you can’t, and what the service will consist of from the railroad. If you try to order up cars that aren’t covered in your ITA, the railroad will not accept them. Or, far worse for you, the railroad actually does deliver the
Must be some sort of club we all belong to right now. For me, I know this forum is the best get-away from the realities of day to day sh…tuff in my life.[^]
Sorry, I can’t do that. As most people know, I rarely shoot the trains that go by me, let alone the railroaders. And with my level of skill, your misery would probably only continue.
Hey, I represent that remark ! You can add my data to that collection of statistics . . . [:-^]
But thanks for this post. There’s someone I want to show it to this week, and at least she’ll know that I’m not the only one with this . . . proclivity ?
Right. That’s all RWM needs to accompany the work misery is a bullet wound that doesn’t do the job.
Reminds me of a great quote from the New Orleans kicker (whose name presently escapes me) ten-fifteen years ago, in answer to how it felt to miss the game-winning field goal in three straight games: “I feel terrible. I feel like shooting myself, but with my luck, I would be wide to the left.”
EDIT: It was Russell Erxleben who came up with that great quote.
I don’t think it’s the new Hudson (a/k/a “North”) River tunnels. It isn’t large enough or difficult enough to justify that kind of attention and money, at least not at this phase. Though largely invisible to the public at large - “out of sight, out of mind” - those kinds of things are always underway in the New York City area.
For example, a project of several decades’ duration - I don’t know it it’s done yet - is the boring of a large (10 ft. diam. ?) new aqueduct tunnel from the Catskills down to center city someplace. (As I understand it, there’s only 1 such aqueduct now to serve the whole city, and it’s been in operation for like over 100 years and has never since been taken out of service for inspection, maintenance, repair, etc. . . . = living on the edge, most professionals think.)
There’s so much construction going on that there’s also a professional group of engineers and contractors for such heavy and highway projects in the NYC area known as “The Moles”, who often sponsor various seminars and programs, day-long tours of the sites for engineering school classes, internships, scholarships, and the like.
I don’t think it’s the new Hudson (a/k/a “North”) River tunnels. It isn’t large enough or difficult enough to justify that kind of attention and money, at least not at this phase. Though largely invisible to the public at large - “out of sight, out of mind” - those kinds of things are always underway in the New York City area.
For example, a project of several decades’ duration - I don’t know it it’s done yet - is the boring of a large (10 ft. diam. ?) new aqueduct tunnel from the Catskills down to center city someplace. (As I understand it, there’s only 1 such aqueduct now to serve the whole city, and it’s been in operation for like over 100 years and has never since been taken out of service for inspection, maintenance, repair, etc. . . . = living on the edge, most professionals think.)
There’s so much construction going on that there’s also a professional group of engineers and contractors for such heavy and highway projects in the NYC area known as “The Moles”, who often sponsor various seminars and programs, day-long tours of the sites for engineering school classes, internships, scholarships, and the like.
As a result, the contractors are pretty good at figuring these things out, and at least they think