BMATWT 352 - Building Materials and Forest Products Marketing

Transporting Lumber - Rail vs. Truck

1. Some Definitions

2. Rail Transportation

3. Trucking

Source: Leckey, Dave, Buying and Selling Softwood Lumber, Chapter 4, Random Lengths, Eugene, OR, 1998

F.O.B., Mill - "Free on Board" an old shipping term designating the point of transfer of title to the goods. When the cargo was swung up off of the dock and over the rail of the ship it was determined to be free on board. FOB Mill prices put the responsibility and cost of shipping on to the purchaser.

Delivered - Puts the cost of shipping and responsibility for owning the goods onto the seller until the goods arrive at the point of final destination.

"I like trains, I like fast trains, I like trains, that call out to the rain" - Fred Eaglesmith

Train types

- Box Cars

- Flat bed or Lumber Car

Approximate flatcar capacities = 200,000 lbs, if lumber weighs 2,000 lbs / mbf this works out to 100 mbf.

A) Advantages

• Unit price of shipping is lower for longer distances > 1,000 miles
• Efficiency - For large buyers, a convenient way to ship large volumes
• Ease of loading - flatcars are easy to load
• Protection of the lumber - boxcars offer great protection.

B) Disadvantages

• Speed - quite slow, measured in weeks.
• Accessibility - need a rail spur to load/unload.
• Difficulty of loading - particularly true for boxcars, plan on more labor.

C) More terms for definition

• Bill of Lading - A document which travels with the shipment describing the goods being shipped and their routing.
• Routing - A complete itinerary of the route of travel for the shipment.
• Tariff rates - Regular published rates.
• Contract rates - Special deals cut for large volume shippers.

D) Rail Rates

1) Weight based rates

Hundredweight (CWT) = 100 lbs.

Example for a load moving from Spokane, WA to Palmer, MA

$4.25/cwt on 170,000 lbs

$4.05/cwt on 190,000 lbs

$3.85/cwt on 210,000 lbs

Flatcar - 66 ft centerbeam with 88,000 bd-ft (88 mbf) of lumber weighing 2,100 lbs/mbf.

Total weight = 88 *2,100 = 184,800

So pay the 170,000 lbs rate = 1,848 * 4.25 = $7,854 total cost or

7,854 / 88 = $89.25 / mbf

2) Per Car Rates

Simply that - $7,500 per car for a given route and a specific piece of equipment.

3) You can ship lumber you haven't sold yet!

Ship to a diversion point. Since you don't know the final destination yet. These cars are called "rollers" or "transit".

If the car must sit at the diversion point you must pay a "constructive placement" fee for taking it off the train.

Also must pay "demurrage" - a per day charge ($50/day) to have the car sit at the diversion point.

Flatbed trailers general specs

Length 40 - 48 ft

Cargo capacity approx. 48,000 lbs. (at 2,000 lbs / mbf, that is 24 mbf)

Cargo range 45,000 - 52,000

GVW stands for Gross Vehicle Weight includes tractor plus trailer plus cargo.

A) Advantages

• Speed - fast, measured in days.
• Convenience - Both time and place convenience
• Competition - Keeps rates low
• Accessibility - Many roads
• Price - Low for short hauls
• Ease of loading - flatbed trucks are easy to load

B) Disadvantages

• Unit price is higher than train or piggyback particularly for hauls > 1,000 miles
• Drivers - Humans are humans.
• Protection from the weather - Tarping extra charge

C) Truck Rates

1) Rate per loaded mile

Ex. $1.25 / mile

2) Price Per hundredweight

D) Truck Terms

Deadhead - running empty

Backhaul - Getting a load to take back to the trucks original home base. Often cheaper than "outbound".

Produced and maintained by David T. Damery
Building Materials and Wood Technology
Department of Natural Resources Conservation
College of Natural Resources and the Environment
University of Massachusetts, Amherst.