Case Study 1 : Shipping & rail supply chain optimisation
- During employment with Eastern Group (subsequently TXU) Jonathan Moser implemented a new strategy for supplying internationally sourced power station coal by rail
- In 1996 Eastern Group acquired five coal fired power stations and inherited contracts which supplied local indigenous high sulphur coal delivered by rail
- Sourcing imported low sulphur coal from Colombia and South Africa provided a better choice of fuel from both a financial and an environmental perspective compared to traditionally sourced domestic coal
- Whilst Immingham had the closest proximity to the power stations for importing coal, and thus the lowest rail price, it was limited to only small handysize vessels (25,000 tonne maximum deadweight)*
- By utilising the deep water port of Hunterston on the Firth of Clyde in Scotland, providing the capability to handle the largest capesize vessels (>150,000 tonne deadweight), and by negotiating new long distance rail rates, Eastern was able to source coal at a substantially reduced supply chain cost when compared to either domestic coal or imported coal shipped via Immingham.