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    Crop Nutrients & Ingredient Producer Success Story

    Aligning rail operations across service design, fleet and distribution network

Maine Pointe took a 'client first' approach to supply chain transformation

The challenge

The world’s leading producer and marketer of concentrated phosphate and potash employs around 7,400 people in eight countries worldwide. Their business engages in every phase of crop nutrition development, from the mining of resources to the production of crop nutrients, feed and industrial products for customers around the globe. Their customer base includes wholesalers, retail dealers and individual growers in more than 40 countries. The management of rail operations was segmented with a relative lack of investment in rail capabilities (processes, people, systems, assets). As a result, the “net value” equation with the Class 1 railroad had degraded over time. Senior executives engaged Maine Pointe to help them review and rebuild their relationship with the rail carrier.

The solution

Leveraging our deep experience of working with North America’s Class 1 rail carriers, Maine Pointe’s industry and practice specialists put together an action plan which included in-depth reviews of rail service design, rail fleet and distribution network. Maine Pointe’s ‘client first’ approach to supply chain transformation included:

  • Designing trains specifically “dimensioned” (sized and reserved) for our client on a daily basis
  • Focusing on unit train movement, while maintaining flexibility to manage 25+ car blocks and carload traffic
  • Providing stability, reliability and velocity by establishing a new hub and executing a strategic approach – a “through strategy” – at major urban junctions
  • Integrating client and railroad supply management processes
  • Optimizing car velocity within a fully integrated car fleet
  • Facilitating growth through strategic capital investments at mine origins, hub yard(s) and on railroad networks
  • Providing market competitive pricing, with further incentives to support a lower-cost supply chain model
  • Creating a contingent service strategy, leveraging hubs and gateways to maintain fluidity and efficiency

The results

As a result of the processes and tools we helped implement the client:

  • Achieved annualized identified and agreed savings of $11.7M to $15.0M in total from a new 7-year freight contract with their Class 1 carrier
  • Realized freight rate savings of $6.2M to $9.5M (based on planned volumes), $2.5M blocking incentives, $0.5M growth incentives and $2.5M fleet productivity savings to be realized over 12 months
  • Achieved a 7.3:1 ROI

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