Operations Illustrated: Running the Rails
Getting the Product Close to the Market
By Therese Dunphy, Editor-in-Chief
Bulk shipment of aggregate by rail offers some interesting advantages to operators who have access to rail cars and distribution yards. Like marine shipments, rail can expand the market reach of operations through low-cost, environmentally friendly shipping.
In contrast to deep-water marine transportation, however, it allows operators to respond a little more quickly to market needs, says Gary Yelvington, president of Daytona Beach, Fla.-based Conrad Yelvington Distributors, part of the Oldcastle Southern Group. “It’s easier to manage inventory needs when you’re bringing in smaller quantities, such as 10,000 tons weekly versus ‘as needed’ material in 60,000-ton vessels,” Yelvington says. “You have to schedule boats a lot further ahead than the short time it takes us to react with our trains.”
As many manufacturing businesses have discovered in recent years, inventory management plays an important role in the business’ success. “Many of us understand lean manufacturing principles, and I think the same thing really applies to terminals, whether they are ship or rail,” says Bob Domnick, vice president of sales, marketing, and engineering for Morris, Minn.-based Superior Industries, LLC. “The right inventory at the right time is critical.”
A network of rail terminals also allows Conrad Yelvington to supply aggregates to markets where local inventories simply don’t exist or can’t keep up with demand. “When I began working for the family business, we initially started railing materials from Tennessee,” Yelvington says. “We had a market, but we had lost the local source in Florida, so we started railing it down.
“During that time, Disney was starting to boom and really expand. There was a pretty big demand for a lot of products that were just not locally available,” he adds. “We opened our first rail distribution yard in Orlando in 1983.” Over the next nearly 30 years, the company grew to include 28 rail yards. In 2007, it was sold to Oldcastle Materials Group.
Conrad Yelvington Distributors currently has two types of business. In its Gulf Coast markets — including Northwest Florida, Alabama, and Mississippi — it owns and operates terminals that provide freight handling for other aggregate producers’ materials. Yelvington moves the material, but the quarry owners are responsible for the marketing and sales portion of the business. “We just provide the rail transportation, rail cars, unloading of the cars, staffing of the terminals, and the terminal sites themselves,” Yelvington says. In Northern and Central Florida, the company also transports its own material for consumption by internal and external customers. For example, granite is shipped from Oldcastle’s new greenfield quarry in Camak, Ga., to supply the Florida market, including Oldcastle’s APAC asphalt plants.
“We have a lot of terminals with a big distribution footprint,” Yelvington says. “It’s very competitive in Florida. We’ve been transporting aggregate for a long time, and we’ve located our terminals in most of the better markets where there is sufficient demand for our products.”
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