Coils to California

[ericsp]

A couple of year ago I was reading on New United Motor Manufacturing, Inc. (NUMMI) website that they use about 300,000 pounds of steel coil a day. It also said that these coils are trucked in from the Midwest.

I guess railroads are not reliable enough for them. I can't see trucks being more economical then rail for this much steel.

What do you figure it would take for railroads to get this business? Of course, they probably don't want it right now.

http://www.nummi.com/

[ericsp]

I was wrong, they get over 1,000,000 pounds of coils per day. That is 5 carloads per day. All comes from the Midwest by truck, read the page at the link below.
http://www.nummi.com/stamping.php

[ericsp]

I just sent this lead to Progress Rail's Rail Retrievers. Let us hope they can figure it out.

[Anonymous]

Logistics: Since NUMMI normally only keeps enough parts in stock to last about five hours, a problem that can’t be corrected quickly can potentially shut down the assembly line.

[jsanchez]

I know a rail car manufacturer in Milton, PA that gets all their steel coils in by truck, because rail is not reliable enough, you think this would be of concern to railroads and suppliers. I know of another railroad supply company that receives everything by truck and ships by truck. Its pretty sad when railroads and suppliers don't even support or use their service, why would they expect anyone else to, a lot of companies would use rail more if they could get reliable consistant service, but instead it keeps getting worse. I think the class 1 railroads are going to wind up being reregulated, they are needed to much to be allowed to continue wiith poor and limited service to shippers. Its a shame they do not learn more from regionals and shortlines about customer service.

[jeaton]

It is entirely possible that the rate that charged by the railroads could be well below the truck rate, but as *** Lewis notes, that is only part of the story.

For the sake of illustration, let us assume the railroads would use covered steel gons and trucks use flatbeds with tarps.

Loading and (more important) unloading. One truck size spot with a fixed straddle crane could do for trucks. Driver spots the load and handles tiedowns and tarps. Could be up to a five car siding for rail, depending on availability of of switch engine. Would probably need a more complex crane for handling coils and plant personnel move the car covers on and off. If this work is done under roof, there is more roof for rail service.

Impact of reliability factor. Trucks breakdown, but not all 25 at one time. Maybe three or four rolls extra in house cover as a reserve, adjusted upward when winter weather causes problems. Using rail service? Two days at least, maybe five or more. Those rolls take space in the plant and space cost money. Quality control probably requires turning over the reserve stock fairly frequently. That means extra handling into and out of the reserve storage.

Most likly "loose car" rail service is going to have more time in transit than trucks. That means there is an even greater quantity of product in the supply chain and that means an even greater amount of invested working capitol with the associated interest expense.

Maybe some additional time is spent on oversight management for rail service. More expense for using rail service.

My guess is that these factors were considered during plant design, a decision was made to go with truck delivery of the steel. Even if the railroads could overcome their inherent service disadvantages, there still might not be enough money on the table to justify making physical conversions to the receiving facility.

The bottom line here is that we wouldn't find the complete answer unless we had access to the work that went into the decision.

Jay

[DTomajko]

As mentioned above, cost is only one consideration in shipping choices. The flatbed trucking company I used to work for had a contract for many years to haul coils from USX Irvin Works in Pittsburgh,Pa. to Hotpoint in Milwaukee, Wi. They were willing to pay a very good rate to have their material delivered by 8AM the next day. Also, Crown Cork in the Carolinas required that its coils spend no more than 48 hours in transit. They were known to reject any coils that were on the truck longer than that without even inspecting them first. Also keep in mind that wild changes in temperature can cause sweating within the rolls of a coil,no matter how much paper or oil was applied,(and USX was very generous with the oil!). Also, with the costs of doing business rising every day,(I will not elaborate, we all know what those costs are),the long ago days of casually disposing of the 4 or 5 outer & inner wraps are long gone. With basic tinplate prices at $600 per ton and up, the customer wants everything it's paying for without waste. When I handled coils, they were set on bevel-edged oak 4"x4" timbers held by coil-racks, with conveyor belt strips between the coil & wood. Under the load chains inside the coil eye were placed metal edge protectors to prevent damage to the inner wraps. If a chain went over the top of the coil, more rubber was placed to prevent digging in to the outer wraps. All of this was covered by either individual tarps,(with a sheet of waterproof paper under the tarp if required),or by a full trailer tarp,(also refered to as a sided flatbed or covered wagon). The previously mentioned individual driver would care for the load until accepted by the customer. As an added incentive, the driver is paid by the load and if doesn,t do a good job, might not be paid for the load if it's damaged or late. Many things drive a customer's shipping requirements, not all necessarily logical or obvious. Good luck and stay safe.

[jeaton]

D

I was thinking about quality, too, but it would have some been speculation on my part. Thanks for your input on that.

Jay

[RKFarms]

I work at the Subaru plant in Lafayette, Ind., and we also receive all coil steel by truck. In fact, we have no inbound rail deliveries and are not designed for it. I see plenty of auto parts going by on the old Wabash line, but none come to us. We get containers (I believe now from Chicago, formerly from TPW transfer site at Remington Ind.) I believe none of the small auto assembly plants have rail delivery, although Toyota Georgetown does, but that is a much larger facility. It was very interesting reading about the economics of shipping. My job is far from our stamping shop and even farther from the main office.

[Anonymous]

There is a curve near the lakefront in Cleveland, where poeple are regularly killed when trucks carrying steel coils tip over.