This document discusses optimizing railcar cycle times in transporting commodities. It defines a cycle as loading, transit to destination, unloading, transit back to origin, and waiting empty at origin. There are variables at each stage that can be optimized, like facility design, equipment, planning, communication, and technology. Specific examples given include facility design that allows easy railroad access without delays, using technology to track cars to avoid delays or losses, and scheduling maintenance during downtime to maximize efficiency. Faster cycle times through these optimizations can significantly increase annual transport volumes and revenues.

1. PEAKER ENERGY. February 2014.
RAILCAR CYCLE TIMES
SUNK COST OR COMPETITIVE OPPORTUNITY?

2. Confidential and Proprietary Information of Peaker Energy GroupConfidential and Proprietary Information of Peaker Energy Group
Content! Cycle Time Defined
" Stages of the “Cycle”
# Constant or Variables
$ Opportunity or Cost? …Opportunity Cost?
Optimization Areas
Optimization Examples
% Thoughts on your “Return Home Cycle”

3. Confidential and Proprietary Information of Peaker Energy Group
CYCLE TIME
DEFINING THE LOGISTICS PROCESS
cycle time |!s"k#l t"m|
noun
• loading a car at shipper’s point of origin
• transit of this car from Origin to Destination
• unloading of the car at the destination site
• transported back empty to origin
• finally, held empty at shipper’s origin until re-loaded and then the
cycle begins again.
exceptions to the process
• backhaul: Loading another commodity at the destination to
return to the origin “full” vs. empty
• new origin: Car unloads at destination but is then sent to a
different origin to load vs the original origin.
!
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CYCLE TIME
STAGES
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Loading
Empty at
Origin
In Transit
Back to Origin Unloading
In Transit to
Destination

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CYCLE TIME
CONSTANT OR VARIABLES
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“Many think of railcar cycle times as constants or only
functions of transit time. There are several variables in the
process that can be optimized. These optimizations may
not appear to be very significant, but exponentially multiply
over volume and time.”

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CYCLE TIME
OPTIMIZATION AREAS
Facility Design
Flow and Ingress/Egress
Car storage
Equipment Selection and Placement
Make sure you have the right equipment in
the right place to optimize the process
Technology
Use technology to not only optimize the
process but make it safer as well.
Look for new technologies and equipment
that can optimize the process
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Planning
Well designed process and operations plan
Bad Order Cars
Scheduled Maintenance / Car Cleaning
People
The most important thing is well trained
operations and HSE staff.
Communication
Communicating with the servicing railroad
and operating staff to best coordinate
movements

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OPTIMIZATION EXAMPLE
FACILITY DESIGN
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Loading
Allows for easy access from servicing railroad to
bring in cars without interrupting or delaying
the loading process or their mainline service.
Make sure you have redundancy in your pumps
to accommodate any planned or unplanned
maintenance.

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OPTIMIZATION EXAMPLE
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In Transit to
Destination
COMMUNICATION
Most of the variables in this stage of the cycle
are out of your control “unless you are the
railroad”
Keeping on top of your scheduling “milestones”
and communicating with the railroad will at
least give you a heads up on any unforeseen
delays like weather, or equip failure.

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OPTIMIZATION EXAMPLE
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Unloading
EQUIPMENT
One of the newer issues with respect to cycle
times that has presented itself is the timely
unloading of heavier, high-viscosity crude oils
off of railcars.
There is the question of what type of heat, how
much, how fast, how many cars concurrently,
pump size, pump type, and the variables within
this issue have thousands of different
permutations.
The key is to find the right combination for the
slate of crudes you will be unloading.
Look at ways to get the crude circulating in the
cars. This will not only help unload quicker, but
will also allow you to recover more of the crude
from the car.

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OPTIMIZATION EXAMPLE
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In Transit
Back to Origin
TECHNOLOGY
Use technology to keep track of your cars and
make sure you don’t have a car dropped or lost
along the way. Having “active” technology can
mean the difference of having all of your cars
back at the origin at the same time or maybe a
couple coming in 2 days later. That gaff could
cause a domino effect on your whole months
schedule.

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OPTIMIZATION EXAMPLE
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Empty at
Origin
PLANNING
Remember to schedule your maintenance
accordingly and ahead of schedule. Make
maximum use of any downtime on cars. If
something needs repaired like an air-hose,
make sure you look at the car’s maintenance
schedule, and if there is anything that can be
done within that window, get it done at the
same time.

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THOUGHTS ON “RETURN CYCLE”
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SAVINGS FROM EFFICIENCY
Q: What are the savings realized from the
reduction of 1 day to the cycle time for a 1 Unit
train* per day move?
DAYS
Load 2
Transit 6
Unload 2
Transit 6
22.8 CYCLES PER YEAR
DAYS
Load 1.5
Transit 6
Unload 1.5
Transit 6
24.3 CYCLES PER YEAR
Results
+105,300 additional bbls for year
+$10.5 MM additional revenue
7500.00 of savings in car lease cost
*Unit train consists of 104 GP 30 Railcars, Cars loaded to 675 bbls, crude price $100/bbl, $2000/mo car lease