Communication is king in coal chain

Better exchange of information and improved integration processes in the coal supply chain can make a big impact on the bottom line. Jamie Wade writes for Australian Mining.

Better exchange of information and improved integration processes in the coal supply chain can make a big impact on the bottom line. Jamie Wade writes for Australian Mining.

With expansion plans in place at all Queensland Ports, the coal industry would be extremely satisfied with the efforts infrastructure stakeholders are undertaking, but will the infrastructure be used efficiently once in place?

That’s a challenge that needs to be investigated, according to TransCoal founder and managing director Faith Dempsey.

After 28 years of exporting coal out of Queensland, Dempsey realised that inefficiencies in the current transport system were needlessly adding millions of dollars in transport and operational costs to mining, rail and port organisations in the Blackwater region.

Her solution? An effective, integrated coal transport system, which would save mining organisations money by eliminating the duplication of resources in each company while maximising/optimising use of the existing infrastructure.

Dempsey sees poor information sharing for supply chain planning and a lack of integration processes as the one of the root causes of inefficiency in the coal supply chain.

She says the industry could be working more efficiently if more information was shared at strategic and tactical levels of coal chain planning i.e. strategic planning three to five months before vessel arrival, and tactical planning three to four weeks before vessel arrival.

“There are several parties involved in planning, then moving, a tonne of coal from minesite to ship within a coal company,” Dempsey told Australian Mining.

“Multiply this by ten coal mines and there are several dozen people (not including rail and port) having a say in the day to day operations of their particular quadrant of the supply chain. Integration of these roles within a coal company would move towards a more streamlined approach and provide prompt reactions to daily issues.”

A strategic assessment, says Dempsey, is the first step to efficiency in coal chain logistics.

“Strategic planning is an important scheduling horizon in supply chain management as it is effectively setting up the supply chain. Currently this is done by coal companies in isolation. In free scheduling environments at ports such as Gladstone for example it isn’t until vessels are actually nominated some three to four weeks before they arrive that a consolidated picture of demand is presented which is too late to react,” she said.

“If this picture could be developed and presented at the strategic mark where ‘peaks and troughs’ of demand are transparent, then coal schedulers have a chance at flattening out those peaks and present a more even or practical shipping schedule to the supply chain where every stakeholder would benefit.”

Tactical planning, says Dempsey, then absorbs the strategic plan and sets up the supply chain for final delivery at an operational level. The benefits are reduced queues, reduced demurrage, improved maintenance planning, and better utilisation of rolling stock and port stockpiles. This strategy would also enhance the present queue management schemes.

TransCoal has successfully developed and implemented for many customers a ‘line of sight’ model of logistic planning where the person who schedules the ship, also orders the trains, models the stockpiles and tracks the coal quality to final delivery. This involves modelling a customer’s individual supply chains three to five months before vessel arrival using production plans, rail commitments, and stockpile capacities at loadouts, ports and shipping plans.

By overlaying these models, a larger view of rail, port and shipping demand can be seen These models are continuously updated with the actual daily activity of production and transport which extrapolates to provide a more realistic future view.

“We’ve been able to deliver advantages to our customers that other coal companies do not have easy access to,” Dempsey said.

“For example, we dovetailed one producer’s ‘peak’ demand with another’s ‘trough’ demand and as more mines join, this system is augmented.”

A ‘pooling’ arrangement where coal is transported and stockpiled is also part of Transcoal’s solution.

“When Minerva Mine commenced operations although their port stockpile was not ready for several months, we scheduled their trains into other stockpiles in the ‘pool’,” Dempsey said.

“On a daily operational basis if one producer cannot meet their trains then arrangements are made for another producer to fill that train and pay it back later. Mines do not produce coal on an even basis so providing this type of flexibility without losing capacity has delivered real benefits.

“An important point is that TransCoal is independent of infrastructure ownership and can, therefore, provide unbiased optimisation to all the scheduling components of the supply chain.

“Our aim is to hand over to rail and port operators in that final 48 hours of coal delivery a streamlined logistic schedule that enhances their own operations as well as delivers the best outcome for our customers.”

At the end of the day, says Dempsey, consolidation of information and pooling can deliver flexibility to a coal operation when they need it and on a larger scale can streamline the entire supply chain.

“The ‘pooling’ benefits are maximised when scheduling several mines together, from the time of contact between marketing departments and buyers three to five months before vessel arrival, to the day of delivery and ultimately the rail and port operator benefit because their schedules are streamlined.

“This isn’t a concept; it’s a proven strategy,” Dempsey said.

n Faith Dempsey

Managing Director


07 3831 8431

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.