Rail access to a port is not always direct; final delivery may be done by a port railroad or a connecting railroad.
Where there is great opportunity, however, there is also great risk. Export shipping can be very risky. Some things coal operators should know. The mine usually cannot ship just one trainload of coal to a port and expect the coal buyer to come pick it up. At a minimum, the seller must make all of the arrangements on the U.S. side. Because of the high risks involved, an inexperienced exporter should not try to charter a vessel for deliveries.
If the customer wants to buy 65,000 mt, the mine must ship 71,500 short tons. If the mine ships 65,000 short tons, the customer will have to pay dead freight charges to the ship owner, and they will pass those extra charges along to the seller. At today’s freight rates, a 10% shortage on tons could cost $325,000 or more.
Is the selected terminal capable of storing the entire quantity the mine wishes to sell, and is it capable of fully loading the cargo? Will that terminal be capable and willing to store that quantity until the ship arrives? The mine does not have to sell a full shipload. In fact, it may have to tell the buyer it can only sell 30,000 mt (33,000 short tons). If that is the case, the mine still has to make sure the storage is available at the terminal when the ship arrives.
Most importantly, unlike tonnage shortfalls in the U.S., ship owners seldom accept a force majeure excuse for failure to provide cargo at ship arrival.
While there is hope in terms of availability of terminals, there is certainly unknown risk that the novice may not wish to take. If that is the case, contact a coal broker, and make the best deal. They will take a share of the profits, but they also take a risk.
—Dave Gambrel (see his Transport Tips column, p. 20)
