Mining companies face a wealth of challenges when it comes to logistics management and transport of extracted payloads. Efficient asset utilization for rail transport is thus pivotal for a profitable mining operations.
It’s vital for mining companies to have some degree of control of rail transports assets (such as rail cars,) however investing in rail cars is not always a cost-efficient solution given that a typical rail car can cost over $50,000. An alternative option is to lease rail cars or utilize rail cars that are owned by the railroad. In either case, effective control in managing rail transport equipment is challenging and time consuming for mining companies.
When mining companies use assets owned by the railroads, it’s important to note that “free running” does not imply zero cost. Rates can cover a number of costs, including the cost to “rent” rail cars that need to be used to transport payloads. Although this might seem like an effective solution for logistics management, there is no guarantee that a consistent supply of empty rail cars will be available.
Leasing rail cars for logistics management can addresses this capacity issue, however this often leads to a higher level of pressure for the railroads to ensure each car is encounter for. As a result, they will tend to demand a higher value cost from the leasing agreement. In essence, this require mining companies to pay close attention to asset utilization for rail transport and logistics management – a common challenge among mining companies that lack the capital to invest in such systems.
The Role of Logistics Management Companies
Third-party logistics management companies can help mining businesses overcome these challenges. Many third-party logistics providers have a focus in industrial applications for not only warehousing and fulfillment services, but also rail transportation. Thus, many logistics management companies have the necessary equipment and solutions, from the rail car scale system to weigh payloads to volume rail fleets for transport.
Some of the most common services and solutions provided by industrial-focused third-party logistics management companies include:
Strategic Analysis of Rail Transport Solutions
Strategic analysis of the decisions and investments to utilize railroad-owned assets. A third-party logistics company can work with the mining company, railroads, and rail car lessors to conduct a strategic analysis of rail transport equipment, its availability, and the overall cost.
Improvement Asset Utilization
Mining companies must avoid idle rail cars – moving, loaded rail cars is essential to a company’s revenue stream. On a regular basis, a third-party logistics provide can monitor and assess the rail car fleet to pinpoint bottlenecks and inefficiencies, such as long unloading times, transit delays, and other inhibiting variables that can slow asset utilization. The logistics management company can then work with the railroads, shipping companies, and other involved parties to troubleshoot and solve these problems.
Tracking Movement of Payloads
Tracking in the rail transport context is no doubt very challenging, but experienced third-party logistics companies have the systems in place to see regular updates. Additionally, the third-pary logistics provided can often times transmit automated data feeds on ETAs (estimated time of arrival) of inbound and outbound rail cars. As a result, this enables mining companies to properly plan for loading and unloading of rail cars, which can help to minimize labor costs while keeping assets moving.