Saving Capital Dollars by Operating with Flexibility
Working with a short line partner like the Port Harbor Railroad can pay off at multiple stages of the game—at construction of your facility, during day-to-day operation, and at key periods when you have to decide how to expand or revise your facility. The PHRR’s relationship with Green Plains Inc. (previously Abengoa Bioenergy of Illinois) highlights all three of these scenarios.
Opened in 2009, Green Plains’ ethanol plant has become PHRR’s largest customer, receiving corn and shipping both ethanol for use as motor fuel and dried distillers grains which are blended into animal feeds. Corn typically arrives by truck while DDGs and ethanol depart by rail. But occasionally corn arrives via unit trains. And as of January 2016, with America’s Central Port opening the new South Dock at Madison Harbor, DDGs can now be loaded to barge for export.
Most unit train facilities that are served directly by Class I railroads need to be built according to a design reference standard provided by the railroad. This includes making a loop track big enough to handle the entire train (typically 110 cars) in a single pass without breaking the train up. Other requirements can include such things as the size of rail used to construct the track and how sharp curves can switches can be. Depending upon the available land, these requirements can be costly, plus construction is often delayed until the railroad reviews and approves the shipper’s designs. In the case of Green Plains, however, by locating on the Port Harbor Railroad they were able to avoid costly Class I design requirements because the PHRR collaborated on a design that made the most sense for the customer, the port, and the railroad—not just the railroad. Due to space restrictions associated with the land available, a normal 15,000-foot loop track was impractical. Using a 9600-foot loop instead allowed the facility to fit on the available land and saved about $1.6 million in construction costs, but to make this design work Green Plains’ unit trains need to be handled in four pieces. This tradeoff was worth it for Green Plains because the combination of 3R’s (road, river, and rail) was ideal: corn can be sourced mainly via truck within a 200-mile radius, ethanol can be shipped nationwide via rail, and DDGs can be sent to the Gulf for export by barge—and the Port Harbor gave an economical solution to breaking up Green Plains’ unit trains.
Breaking up a 110-car train can be time-consuming, and extra time can mean extra detention costs that eat into Green Plains’ margins. But the PHRR makes sure the unit trains never miss a beat. Prior to the first unit trains unloading, PHRR founder Terry Respondek was on site to work out the operating plan with Green Plains. Logistics Manager Brad Ross tells how Respondek rounded up a full train of 100 cars and a crew. “We did dry runs to try and see what would happen. Terry helped us develop an operating plan before the first unit train arrived.” Ross lauded the PHRR’s thorough approach, stating “They’ve been very successful coming up with unique and safe ways to unload our unit trains in as little as 8.5 hours.”
When it came time to complete the South Dock at Madison Harbor, the PHRR and Green Plains collaborated again, only this time America’s Central Port joined the table to help find solutions. Rather than have Green Plains retrofit a new conveyor system from the current DDG storage facility to the dock, the PHRR and ACP found a solution that was attractive from a cost and capital standpoint. ACP constructed a rail-served barge unloader, and once the dock opened, Green Plains was able to seamlessly shift the loaded railcars from the old rail-served destination to the new dock. Green Plains is able to reduce the DDG fleet from 70 cars to 45 cars, can avoid costly retrofits, and experienced no down time in making the transition. Once everyone is proficient in the new arrangement, Green Plains will be able to reduce the car fleet even further.
Ready availability of the 3 R’s—plus creative collaboration between Green Plains, the Port Harbor Railroad, and America’s Central Port—have been key to making Green Plains successful. “From the general manager to the conductor, everyone is very helpful and very attentive, and will do whatever we need. The crews are safe, and will talk with us in advance of moves,” stated Ross. “The flexibility that the PHRR has given us is tremendous because we don’t have enough room.”