The struggling mills, facing long-term declines in paper demand and intense international competition, wanted to grab every order they could. Changing market conditions led to variable demand levels for the mills. Instead of having a 30-day outlook for paper orders, the visibility shrank to just 10 days.
And that meant too short a lead time for Omya and its regional railroad partners, Vermont Rail System and Pan Am Railways, to reliably ship tank cars laden with limestone slurry. In general merchandise service, it took the tank cars anywhere from seven to 10 days to reach the mills.
“Having that variability…put us in a position where we were losing business to truck,” Michael Bostwick, Pan Am’s executive vice president for sales, said last month at the North East Association of Rail Shippers conference.
“Something had to change,” Sheldon Ellis, logistics manager for Omya North America, told the conference.
There was no way to smooth out demand from the mills. So Omya figured it had to focus on the one thing it could change: The variable transit time its tank cars faced on the railroads.
“The only way that was going to happen was with collaboration,” Ellis says.
Omya convened a meeting at its Florence, Vt., plant in November 2015, including everyone involved from Omya, VRS, and Pan Am.
After a daylong meeting, they developed a new plan for weekly unit train service that required changes on everyone’s part. Omya would have to load the cars in blocks. VRS had to stage the cars and build the train. And Pan Am had to commit to running the slurry train regardless of the car count.
Operating a unit train reduces switching on VRS, bypasses classification at Pan Am’s East Deerfield Yard, and limits switching at Pan Am’s yard in Portland, Maine, where the blocks are added to trains bound for the trio of mills.
“It’s the Hunter (Harrison) philosophy: Touch it one time, never touch it again,” Bostwick says.
The 70-percent reduction in car handling eliminated the transit time variability. Omya has the cars loaded by Friday night. VRS builds the train in its Rutland, Vt., yard and delivers it to the interchange at Bellows Falls, Vt., Saturday mornings. Pan Am picks it up and runs it to Portland, with delivery to the mills by Monday evening.
“Since we started this we have not shipped one truck,” Ellis says. The train, symboled BFPO on Pan Am, has been averaging around 55 carloads.
The service began through the VRS-Pan Am interchange at Hoosick Junction, N.Y. But Norfolk Southern’s purchase of the south end of the Delaware & Hudson from Canadian Pacific in the fall of 2015 ultimately changed traffic patterns and swelled merchandise volumes. VRS ran out of room at Hoosick to build the unit train.
So last year VRS made Hoosick Junction a gateway for westbound traffic and Bellows Falls the gateway for eastbound traffic, and the Omya train shifted to the Bellows Falls interchange, says Gerry Racette, vice president of business development for Vermont Rail System.
