The U.S. shale oil boom is putting millions of tons of sand onto North American railroads, enabling carriers to pack trains full instead of hauling just a handful of cars at a time.
With help from Union Pacific Corp. (UNP) and Warren Buffett’s BNSF Railway Co., the sleepy silica sand industry that once mostly supplied glassmakers now ships more than 20 million tons of the material a year. Buyers including Halliburton Co. (HAL) and Schlumberger Ltd. (SLB) use the sand in hydraulic fracturing at oil fields in Texas and North Dakota.
Miners such as Emerge Energy Services LP, U.S. Silica Holdings Inc. (SLCA) and Hi-Crush Partners LP (HCLP) are taking a page from the grain industry’s playbook to deliver sand faster and cheaper. They’re building facilities at their mines to load unit trains, which move just one type of cargo, and near oil fields to empty them.
“The customers more and more are saying ‘We don’t want the headache of logistics. That’s on you,’” Rick Shearer, chief executive officer of Southlake, Texas-based Emerge (EMES), said in an April 14 phone interview. “We’ve scrambled to put in a network of storage and trans-load sites all over North America.”
Read more: http://www.bloomberg.com/news/2014-04-17/fracking-sand-spurs-grain-like-silos-for-rail-transport.html