Canadian Plastics

Bulk Binge

In the face of a steady rise in the price of most commodity resin grades since the first of this year, processors have two options: they can either be philosophical, or they can take action. Employing...

August 1, 1999   By Michael LeGault, editor



In the face of a steady rise in the price of most commodity resin grades since the first of this year, processors have two options: they can either be philosophical, or they can take action. Employing the services of bulk resin transfer facilities is one practical and effective way to take action and reduce the impact of increasing raw material costs.

Bulk transfer facilities offer a variety of services to processors, but the most basic one is getting resin from the rail yard to a plant’s silo. In doing so, however, the transfer facility can store large quantities of resin until a processor is ready to use it, thereby effectively acting as a hedge against future price increases. A transfer facility can also ensure uninterrupted delivery, relieve personnel from the onus of handling assorted transportation logistic headaches and give processors more effective access to the entire resin market, increasing the likelihood of finding a particular grade of resin at more favorable pricing.

QUICK TURNAROUNDS

G.A. Foss, located in Concord, Ont., has track sufficient to store up to 150 rail cars, says vice president Jim Taylor. A processor can buy resin either through a distributor, or directly from a resin manufacturer, and have it shipped to the G.A. Foss yard. G.A. Foss can then off-load the resin from the rail car into their trucks and transport it to the processor on an as-requested basis. Foss charges a flat rate per kg to transport the resin to the processor’s facility.

“There’s a lot of large volume resin users who don’t have rail sidings at their plants,” says Taylor. “It can be inefficient and costly for them to unload the resin and get it to their plants once the shipment comes to the main rail yard.”

G.A. Foss is a stone’s throw away from the main Toronto CN terminal, Macmillan yard, notes Taylor. When a shipment of resin-containing rail cars comes in, CN will shunt the cars onto the track owned by Foss. Once on site, Foss can move the rail cars using its own shunting locomotive to pull a particular car into the loading area. Taylor says that having the shunting locomotive allows them to get a load of resin to customer in as little as an hour after a shipment has been released.

Taylor says his company’s services can help a molder “demystify” the process of getting cost-effective, timely shipments of bulk resin to his plant. As a CN customer, G.A. Foss has access to the CN e-commerce tracking system, which it can use to locate the position of rail cars anywhere in North America. A rail car can hold 60,000 to 80,000 kg of resin. The resin is off-loaded into a transport truck, with a capacity of 20,000 to 30,000 kg. The resin is delivered to a molder’s facility a truck load at a time, as needed, until the rail car is empty.

G.A. Foss has developed an on-line spreadsheet which lets it track and verify the amount of resin in each rail car. In some cases, Taylor reports, they have found that the actual weight of the resin in the car is less than the reported weight on which the customer is being billed. The tracking system provides customers with a check that they’re getting the amount of resin they’re paying for, says Taylor.

Using a bulk resin transfer facility also protects the processor against disruptions in supply, notes Taylor. “If there is an ice storm, the supply is already here.”

FULL SERVICE TRANSPORT

Going to a bulk resin delivery system needn’t mean that the job of getting resin to the plant will rest entirely on the shoulders of the processor.

CANAC Inc. offers a variety of transportation services for both large and smaller plastics suppliers and processors, notes Isaac Haboucha, market manager, industrial sector. These include helping the processor arrange resin transfer logistics, such as rail car management, yard inventory control, product handling and loading and unloading. For processors with rail car sidings, CANAC’s service can include switching cars in and out of the plant, rail maintenance, training and transportation capacity studies.

CN Rail has approximately 20 transfer facilities across Canada for receiving rail car shipments of bulk resin, according to Maryanne D’Souza, commodity manager, plastics. Freight charges are included in the cost the processor pays for the resin. Once a shipment arrives, either CN or the processor can schedule a truck to off-load and transport the resin to the facility.

According to the purchasing manager of a Toronto-area medium-sized processor, use of a bulk resin transfer facility has saved the company significant money and simplified resin delivery. The processor buys its resin through a distributor and has purchased up to 30 rail cars of resin at one time. The resin-filled rail cars are stored at the transfer facility.

“When we’re ready for a shipment I just call the facility and issue a release order for a particular rail car,” the purchasing manager says. “They bring the resin over in a truck and load into our silo.” CPL


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