Maysville: Total Transportation

A total transportation system providing for delivery of finished products to customers and raw materials to the plant is one of the key elements contributing to Dravo Lime Co.'s success. Dravo Lime operates one of the largest noncaptive lime and limestone plants in the US at Maysville, KY, where products produced can cost as much to deliver as they do to manufacture, depending on the product itself, its destination, and mode of transportation. With delivery costs comprising a significant portion of total costs for its products, Dravo Lime has made total transportation services an integral part of its business strategy. Prices for most products produced at Maysville are quoted f.o.b. destination. In short, Dravo Lime's Distribution Department relies on the approach that says to customers: "Leave the delivery to us." The 0.9-Mt/a (1-million stpy) Maysville facility, located about 121 km (75 miles) east of Cincinnati, OH, on the Ohio River, primarily produces sulfur-absorbing Thiosorbic lime used by coal-fired electric utilities as a scrubber reagent to remove SO2 from stack gases. The product is currently supplied to eight power plants in the Ohio River valley region which extends through portions of Kentucky, Indiana, Ohio, West Virginia, and Pennsylvania. The plant ships approximately 907 kt (1 million st) of lime and a comparable amount of limestone fines each year. In addition, it arranges for delivery of about 181 kt (200,000 st) of coal to the plant. Lime is transported by covered hopper barges, covered rail cars, covered dump trucks, and pneumatic trucks. It is transferred from barges to storage silos and trucks at a terminal on the Ohio River near Marietta, OH. At another terminal near Aliquippa, PA, lime is transferred from barges to silos, trucks, and rail cars. Future plans call for rail-truck transfer terminals. To produce lime from limestone at the Maysville plant, about 181 kt (200,000 st) of coal is burned annually in three coal-fired kilns. In transporting this coal from the mine to Maysville, Dravo takes maximum advantage of opportunities for reloading carriers with limestone for outbound backhaul movement. Coal, shipped from southeastern Kentucky mines in rail cars, is transferred to barges at a river terminal in West Virginia. After it is unloaded at Maysville, the barges are cleaned with a front-end loader and then reloaded with limestone. Limestone also is backhauled in connection with truck deliveries of coal. The economics of using backhaul shipments has permitted Dravo to enter into markets in which Maysville limestone otherwise would not be competitive. The company plans to backhaul limestone in empty open hopper cars in the future. As part of its ongoing assessment of the distribution system that supports the Maysville operation, Dravo Lime recognizes that a new environment has developed between shippers and carriers because of regulatory changes in the railroad and trucking industries. Although dry bulk shipments by barge to and from Maysville have always been unregulated, other forms of transportation have not. With railroads and motor carriers now approaching varying degrees of deregulation, contracts and agreements are replacing tariffs, and rate negotiations are becoming a daily activity. Dravo Lime plans to take advantage of these transportation changes, all of which may be beneficial to both its plant and its customers.