When a pipe shipper wanted to make pricing more competitive to win a bid in a key inland market, UPDS devised a more affordable transportation plan using rail.
Released September 30, 2016 Case Study
A pipe shipper had been relying on truck to transport product from a Houston port to destinations in the Niobrara shale more than 700 miles away. Although trucks got the product where it needed to go, it wasn’t the most cost effective transportation method. So when it came time to rebid the business, the pipe shipper needed to find a way to cut costs and beat out the competition, while maintaining the same level of service. Their plan? Leverage rail to lower transportation costs and bid the job at a more competitive price.
This shipper knew rail could offer a more affordable option, but had never used it before. The company also lacked the staff to coordinate shipping and the facilities for staging and storage of the product. They needed an expert who could navigate rail and provide logistics services to make sure the product arrived in the right place at the right time.
The UPDS Solution
With an extensive rail background, the UPDS team developed a solution. Pipe would arrive in Houston by sea, then be trucked immediately from the ship to the UPDS Galena Park Railport for staging and storage. As demand for pipe arose, UPDS loaded it onto rail cars bound for the UPDS Denver Railport. Upon arrival, the product was staged for final delivery by truck to the Niobrara shale. Along the way, the UPDS team monitored flows to ensure the product arrived when and where it was supposed to. By using rail and UPDS transloading facilities to move the product between truck and train, the lion’s share of the move was done on rail. And, with staging, storage and logistics services, the product was delivered without disruption.
Just as they’d hoped, our customer won the bid thanks to the savings they achieved through rail. UPDS moved the equivalent of 680 truckloads by rail, while still maintaining on-time delivery to the job site. Likewise, by storing product at the transload facility in Denver and utilizing truck for final delivery, the shipper was able to provide the receiver with inventory flexibility and on-time delivery to the job site. In the end, the receiver was just as happy as when the product was trucked all the way from the port, as the difference to them was unperceivable. But to our customer, the savings — and the retained business — were apparent.
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