We conducted a benchmarking study on coal transportation issues and opportunities to understand how utilities are preparing to manage continuing growth in coal volumes. Specifically, we focused the study on three critical areas:

• Equipment - Is the equipment fleet adequate to handle the large volumes of coal expected?
• Unloading facilities - Are facilities capable of handling forecasted volumes?
• Cycle times - Are process times in the overall coal transportation supply chain (from mines to power plants and back again) efficient and effective enough to meet future needs?

Some of the results are encouraging as selected utilities are taking action to meet their future coal handling needs. These utilities are upgrading facilities, purchasing equipment, improving cycle times, and more aggressively monitoring performance.

However, other results are troubling. Some utilities report car shortages, outdated equipment and facilities, maintenance problems, slow process times, and limited use of performance measures. These utilities also indicate little focus on addressing these issues, shortages of capital, and inadequate teamwork with supply chain participants to be able to pursue these problems together. We believe that these problems facing the industry can be addressed, but it needs to happen soon to avoid severe consequences.

Results of this study, conducted by Norbridge's Lee Clair and Pete Fordham, were presented at the National Coal Transportation Association conference in Napa, CA in April 2006.

View the results of our analysis on Coal Transportation Issues and Opportunities.