Bulk Commodity Freight Cost

[Smurf1976]

Does anyone know roughly how much it would cost to transport bulk quantities (say, 250,000 tonnes per year) of a solid commodity (eg coal) over a given distance (150km for example) by road or using an existing rail network? Including all the costs for loading, unloading etc.

There's no specific reason for asking but I've had cause to wonder from time to time in relation to various mines etc what the economics of bulk commodity transport by road or rail are.

The size of trucks used would need to be suitable for public roads, through towns, travelling through roundabouts and turning at traffic lights and so on so probably 25 - 50 tonnes (?) per load I would think? A road train wouldn't be a serious option in many cases even though it's presumably cheaper.

Also, what about shipping? Anyone know how much it would cost to, for example, take coal from a port in NSW / Qld and ship it to Victoria or Tasmania including the loading and unloading costs etc? Not a precise figure (I don't want to buy any coal...) but is it $1 per tonne or $100?

 

[ducati916]

Smurf

At last someone is thinking of the "cheap" way to play the commodities boom.

There's no specific reason for asking but I've had cause to wonder from time to time in relation to various mines etc what the economics of bulk commodity transport by road or rail are.
Also, what about shipping? Anyone know how much it would cost to, for example, take coal from a port in NSW / Qld and ship it to Victoria or Tasmania including the loading and unloading costs etc? Not a precise figure (I don't want to buy any coal...) but is it $1 per tonne or $100?

These are US prices; By Rail;
Consumer products; $1009 per car
Industrial products; $1979 per car
Coal; $1170 per car
Agricultural; $2467 per car

These prices are for The Burlington Northern. I can find no "per tonne figure"
This would make sense really, as it would be un-economic to freight half empty cars.

Rails, in the US are currently overvalued, their price has been rising for at least a couple of years.


Industry Statistics Railways
Market Capitalization:..................................... 136B
Price / Earnings:............................................ 18.4
Price / Book:................................................. 2.4
Net Profit Margin........................................... 11.6%
Price To Free Cash Flow ................................ 124.2
Return on Equity:.......................................... 12.7%
Total Debt / Equity:....................................... 0.6
Dividend Yield: ..............................................1.1%


SHIPPING;

Cape size;..................................................Panamax;
4/6 months = $36,500/day..............................$18,750
1yr = $33,000/day.........................................$$17,250
2yrs = $27,500/day.......................................$14,250
3yrs = $24,500/day.......................................$13,000
5yrs = $23,500/day.......................................$12,500

These prices are for DryShips (I hold)
They have 27 ships in the fleet with a 98% utilization ratio.
At a P/E of 2.3 & dividend yield of 9.8%, they represent an attractive way to play the commodity boom.

However the entire shipping industry is currently undervalued.

Industry Statistics Shipping
Market Capitalization:......................... 35B
Price / Earnings:................................ 10.1
Price / Book: .....................................1.7
Net Profit Margin............................... 18.4%
Price To Free Cash Flow.................... -6.1
Return on Equity:.............................. 17.9%
Total Debt / Equity:.......................... 1.1
Dividend Yield:................................. 6.5%

The whole industry has reinvested, or are in the process of doing so, hence the negative free cash flow figure.

jog on
d998

 

[The Once-ler]

It cost me $25 per tonne to send grain 200k's from my farm to Newcastle. It costs $10 per tonne to send grain 16k's from my farm to the local silo. Therefore the loading/unloading costs around $7 to $8 per tonne I would say. This is using semi trailers carrying 27 tonnes or B Doubles carrying 36 tonnes.

I can also send the grain by rail, and it costs slightly less, say about $20 per tonne. However to do that I still have to send it to the silo, so that costs as I said above, $10 per tonne so I'm better off using trucks direct from the farm.

I would imagine coal costs would be similar. Grain is heavier than coal [I think].

As to ships, it gets very cheap once you are talking 50 000 tonnes on a boat. Just looking at the export freight rates of sending grain around the world, I'm only guessing here, but it is around the $20 per tonne to send grain to China or Iraq or somewhere, give or take a fair bit. That's including loading/unloading.

Does that help?

Cheers.