Willmar Municipal Utilities incurring more charges this year for detaining BNSF cars
WILLMAR — Several factors are combining this year to increase demurrage charges paid by Willmar Municipal Utilities to BNSF Railway.
Demurrage, a 17th century term, is defined as a charge for detaining a ship, freight car or truck.
Willmar Utilities pays BNSF demurrage if rail cars delivering coal to the downtown power plant are not unloaded fast enough and returned to service.
The charge is related to the number of coal cars delivered at any one time. It’s also related to the day of delivery, such as late in the week leaving cars sitting on a siding over the weekend.
Wesley Hompe, utilities general manager, says demurrage charges begin two to three days after BNSF parks or places the cars for the utility to unload. Sundays and holidays don’t count toward the days.
The cars are stored on a siding until they are needed by the utility. At 10th Street Southwest, a utility employee throws a switch and a machine that drives on the tracks pushes cars onto the utility’s siding. The machine can handle two cars at a time.
The utility orders eight coal cars per week, but deliveries have varied, ranging from a maximum of 34 cars in a seven-day period down to zero cars in a four-week span.
Demurrage declined from an average of $1,081.25 per month in 2012 to $843.75 in 2013, but has risen sharply this year to an average of $1,987.50 per month in January and February.
“It is obvious that the demurrage costs have gone up recently,’’ said Hompe. “Not all of that is caused by the railroad. Some other factors include weather, experience of coal handlers and the condition of the coal.’’
Hompe said the power plant elevators allow for unloading about 640 tons into the siloes in a day. Because of limitations of the 35-year-old unloader and moving cars from the siding to the coal chute, the utility can unload an average of four to a maximum of five cars a day.
Fewer cars can be unloaded in a day, however, if the coal shows up frozen, which is not unusual this time of year. Workers must thaw the cars out and then can only unload two cars a day, said Hompe.
“If it’s not frozen, we may have too many cars to offload in time because we’re lucky to get four off a day,’’ he said. “If they’re frozen, it takes even longer. As we’re trying to get that out of the cars, the clock is ticking.’’
Plans are underway to construct a new coal unloader this year. In October, the Municipal Utilities Commission approved a $148,859.50 bid from Sarka Ltd. of Tifflin, Ohio, for a new hydraulic unloader.
The work includes construction of supporting steel where the unloader will sit. The new unloader will be more efficient, but will mainly provide a safer work environment for the coal handlers.
“We’re waiting for the frost to come out of the ground to put foundations in,’’ Hompe said. “Construction is planned to begin once frost is out of the ground this spring.’’
Hompe said the existing unloader is worn and needs repair.
“If we can use a modern, safe unit, our people will be much better off,’’ he said.
“But as stated above, the chute can only unload 640 tons in a day regardless of the number of cars we park above them.’’