Norfolk Southern is supporting ethanol shippers with a new virtual inventory management and delivery system that can cut in half the time it takes to transload shipments at Thoroughbred Bulk Transfer (TBT) facilities.
The new system, the first of its kind in the rail industry, combines ethanol shipments from multiple customers into a single inventory in a process called comingling. This expedites transloading operations by enabling trucks to access ethanol from any rail car when they arrive at the terminal.
Since the system was implemented in October 2010, NS has increased the efficiency and capacity of its TBT comingling facilities. For example, at Alexandria, Va., the transload process dropped from an average 90 minutes to just 30 minutes.
"By creating a virtual inventory, we are taking the variability out of service, increasing flexibility and accessibility to the product, and decreasing the time it takes to get the product to blending and storage facilities," said Charlie Brenner, NS assistant vice president market systems and development. "We visualize it as a 'rolling storage tank' that streamlines access to a customer's ethanol supply."
Customers can access real-time information on shipments through the enhanced NS Ethanol Dashboard, a component of the new inventory system's software developed by NS' e-commerce team. The Web-based application tracks the quantity of ethanol each shipper uses and automatically updates inventory levels, monitors shipments in transit, and provides access to historical data. Truck arrival and departure times also are recorded. In addition, NS monitors each customer's supply chain, sends automated alerts if inventory levels are low, and in some cases assists with purchasing.
OSAGE Inc., the largest independent distributor of motor-fuel grade ethanol in the Southeast, has been using the new dashboard since the beginning of 2011. "The operational change at the rail siding from segregated inventory to comingled inventory has improved efficiency and reduced incurred demurrage charges to almost zero," said OSAGE Chief Financial Officer Wes Spruill. "This represents real cost savings to our business. With the NS Ethanol Dashboard and comingled storage, the Pineville rail siding has now become one of the simplest distribution points with which I work on a regular basis."
So far, more than 150 million gallons of ethanol have been transloaded using the new system at Norfolk Southern TBT facilities at Doraville (Atlanta), Pineville (Charlotte), N.C., and Alexandria, and Petersburg, Va. NS also will offer the new inventory system at its recently opened TBT at Pottstown, Pa., and in Roanoke, Va., scheduled to open in January 2012.
Norfolk Southern serves 22 ethanol production plants that manufacture 2.16 billion gallons of ethanol annually. In 2010, NS transported 2.13 billion gallons of ethanol, about 16 percent of the total U.S. production, through a network of 75 facilities strategically located to serve suppliers and consumers in the eastern and southern U.S.
Norfolk Southern Corporation is one of the nation's premier transportation companies. Its Norfolk Southern Railway subsidiary operates approximately 20,000 route miles in 22 states and the District of Columbia, serves every major container port in the eastern United States, and provides efficient connections to other rail carriers. Norfolk Southern operates the most extensive intermodal network in the East and is a major transporter of coal and industrial products.