Thanks for the info, Mr. North.
The 120-ton figure I gave was for net tonnage, based on the 242000-pound (or so) load limit I’ve seen on most of the newer WEPX cars (of course, you’re right for the gross tonnage, which is what you have to handle all the time).
I see on the Boatnerd website (http://www.boatnerd.org) that Oglebay Norton’s
Steamer “Middletown” is scheduled to haul two loads of coal from MERC to WE Energies in Milwaukee next week. 17,500 tons each trip. This could be some of that coal.
beaulieu,
you may be correct. I talked with my nephew today; he said the place where he is picking up the coal is empty now, with some due in a few days.
He was only able to find out that the coal is DEFINITELY coming from Superior!
Is there any way to get coal to Superior other than by train? And if it is coming to Superior by train, why is it being transloaded for the short trip from there to Kenosha? That seems very inefficient to me.
As mentioned elsewhere, the shipper calls the shots. If Wisconsin Electric is getting a better rate for a rail/boat shipment by way of Superior, then that’s the way the coal will move.
All coal except the rare load of Met Coal comes into Superior by train. Mostly by BNSF but UP gets a small amount. MERC is a subsidiary of Detroit Edison, and WE Energies may have bought the coal from them. Also much of the coal at MERC comes from Montana mines which haven’t been affected by the problems in Wyoming. Finally boat shipping rates are lower even with the longer distance especially since there is overcapacity on the Lakes right now with the drop off in Iron Ore shipping.
Are you sure this is PRB coal, or even domestic coal? I recall that a few years back you could get low sulfer 11,000 Btu/Lb coal out of Indonesia and China for around $5.00/mt. Even if that price has doubled since then, it’s still alot cheaper on a $$/Btu basis than even PRB coal. If it is from overseas, that would make more sense than that coal coming from the PRB via BNSF or UP to Superior, then by barge down to Kenosha (which I assume is also conected to rail via UP and/or BNSF). The only scenario I can see that fits that somewhat convaluted routing is if one of the PRB players doens’t have a direct rail connection to the WE facility, and doesn’t want to let it’s competitor play “spin the bottleneck” aka shorthaul rate manipulation.
The coal coming from Superior isn’t a guess, it is directly from the MERC website via a link on the Boatnerd website. MERC exists because several of Detroit Edisons powerplants are located on the Detroit River and the St. Clair River and not connected to any Railroad. Therefore all coal to these plants must come from Great Lakes vessels. Any coal coming from Overseas would most likely have to be transshiped as most Oceangoing Bulkers are too large for the St. Lawrence Seaway. Coal from Colombia is commonly imported into the US but mainly goes to plants in Florida and via the Port of Norfolk. The cost to move it into the interior of the US is too high. To give you an example of an odd move of Lake Coal there is a shipment of Colorado coal coming into MERC next week via the UP. It will be loaded into the Laker Presque Isle at MERC and will move from there to CLM’s Limestone Dock in another part of the harbor and be unloaded. All this to avoid interchanging the coal trains to BNSF for a move of less than one mile. MERC does have automated car-dumping equipment which CLM lacks,but avoiding interchange is the primary reason for the move.
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QUOTE: Originally posted by beaulieu
The coal coming from Superior isn’t a guess, it is directly from the MERC website via a link on the Boatnerd website. MERC exists because several of Detroit Edisons powerplants are located on the Detroit River and the St. Clair River and not connected to any Railroad. Therefore all coal to these plants must come from Great Lakes vessels. Any coal coming from Overseas would most likely have to be transshiped as most Oceangoing Bulkers are too large for the St. Lawrence Seaway. Coal from Colombia is commonly imported into the US but mainly goes to plants in Florida and via the Port of Norfolk. The cost to move it into the interior of the US is too high. To give you an example of an odd move of Lake Coal there is a shipment of Colorado coal coming into MERC next week via the UP. It will be loaded into the Laker Presque Isle at MERC and will move from there to CLM’s Limestone Dock in another part of the harbor and be unloaded. All this to avoid interchanging the coal trains to BNSF for a move of less than one mile. MERC does have automated car-dumping equipment which CLM lacks,but avoiding interchange is the primary reason for
That’s a very simplistic response. In the case I cited, this will be the fourth time this year that this has happened. There is a bit more to this than you suggest.
First the coal has to be higher BTU coal as that is what the kiln is designed to burn. Second the combination of price and availability from the mine and freight rate means that the coal will come via the UP. If one of the mines located on the Utah Railway had offered a better price, enough better to offset the slightly longer haul, and could have provided it at the right time, then BNSF could have gotten the long haul. That is a lot of Ifs. Second, while Coal Companies complain about freight rates being high, it IS relative, the bulk rates per ton per mile are lower than merchandise rates. The company buying the coal doesn’t care whether the coal is cheap and the freight rate high or vice versa, he just cares about how much it will cost him to have a load of the right type of coal sitting on his dock.
No, it’s trivial. A few thousand tons of coal by lake boat doesn’t mean a thing. Although you make claims that it does.
You did type…“but avoiding interchange is the primary reason for the move”…, didn’t you?
Not I.
Two further points, as I said earlier this is probably coal puchased from Detroit Edison, they stockpile coal at MERC in Superior, and haven’t been seriously affected by the problems in the PRB. Second, the UP has a major track renewal project going on in western Illinois which is affecting a lot of trains, on a daily basis UP is detouring traffic via CN/IC, IAIS, IC&E, and via their own route through the Twin Cities because of daytime track work. So even if WE Energies
could find the extra coal cars to handle the 800,000 tons of coal in a timely manner UP probably couldn’t handle the extra trains right now, and perhaps the mines in the main part of the PRB couldn’t even supply the coal right now. Superior receives about 80 - 85 percent of its coal from mines in Montana, most of which are not operating at maximum capacity.
Yes, I did. For a spot, non-unit train movement like this BNSF’s price would be higher as would be their costs. It is very hard to beat the lakers prices for moves like this, they are currently operating below capacity unlike the railroads.
beaulieu - Thanks for the clarifications. It does make sense that temporary capacity problems on UP and BNSF would result in a temporary “give-away” of cargo to a mode of a different feather.
greyhounds - I was hoping for somethink more general, not limited to this particular operation. Why would the railroad industry as a whole give blessing to the idea of one railroad transfering freight to a barge line and a trucking outfit rather than interchanging that freight with another railroad?
“A house divided against itself cannot stand…”
Since it’s the shipper’s money, he gets to call the shots. It would appear that the lake boat operator gave a better rate (in part because of the aforementioned overcapacity) as part of a joint rail/boat rate than an all-rail rate.
Paul,
That’s interesting, in that here you say it’s the shipper who calls the shots, yet in other threads you say it’s the railroad who calls the shots and if the shipper doesn’t like it, tough.
What you’re missing in this particularity, is that the line haul to Superior is probably longer than the line haul directly to the power plant, and in addition to the Superior line haul we also have a barge haul and a truck haul, all adding unnecessary mileage (and fuel use) to the entire venture. Would it suprise you to learn if this move is actually costing UP more to run it to Superior than to run it within a stone’s throw of the power plant itself, all because UP doesn’t want to give traffic to a rail competitor who just happens to have the last mile?
There’s a bigger problem going on here, one that is wasteful of precious resources, and all because we still cling to this anachronism of closed access railroading. I am all for the various modes working in unison to optimize supply chain efficiencies, but when we have convaluted routings (whether via multimodal or a single railroad) it begs the question as to whether it is government policy that is allowing something that would not occur in a truly deregulated free market transportation industry.
It has been true since the beginning of time, is still true today, and will be true until the end of time, that the shortest distance between two points is a straight line. When this very basic premise is violated, it means someone somewhere is paying an added cost that should not have been incurred.
The most economical distance isn’t necessarily the straight line between two points. Have you seen the computer generated electricity transmission maps that determine the most efficient location patterns? Linear Algebra is what it was called when I studied it. Transportation entails many variables, too.
Capacity between two points certainly plays a role. That’s why a modern transportation system should have redundancy and dispersion between two points that may be of a longer distance than the straightest line. I’m not entirely sure capacity issues played a role in this particular case so much as intramodal squabbling.
Redundancy is an expensive option, especially since there is no guarantee that it would be used, which could make it a wasted investment, which in turn is something upon which large shareholders frown.