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Texas City, Texas
April 21. 1967 VGM Tanker Study
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G. T. Ryan F* 8. Bonham - St, Louis
w* Latimer/F. Griseota W* T. Anderson
The following memo summarizes the data required to decide if tinkering of VCM is economically feasible*
Two mode# of transport will be evaluated and compared*
1. 10056 by tanker from Bow to terminal storage at New Haven, 10096 trucking from the terminal to the Springfield plant and outside customers.
2* 100% by tank car from Dow to the Springfield plant and outside customers*
The following volumes will be used in the study* All data are in millions of pounds.
Year
1970
1975
1980
1985
Volume thru the Terminal
200
230
,250
250
Volume to Springfield
85-100%
85-100% 85-100%
85-100%
Volume to Outside Customers
~ 0--15%
0--15%
0-15%
0-15%
*
The following data is required for the Terminal operation W. T, Anderson.`
Total fixed and variable cost data for unloading the tanker, for storage of the VCM, and for loading tank truck and possibly some tank cars.. The cost must include sampling and laboratorytesting costs if these are required*-
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April 21. 1967
There are several alternates to bo evaluated. They are
1* Type of storaget Material will arrive refrig erated* Material can be stored either refrig erated or under pressure.
2. Storage requirements(2 possible alternates)
a. 22 tanker arrivals per year require 35M lbs. * of usable storage
b* 44 tanker arrivals per year require 20M lbs. of usable storage.
Do not at this time impose upon the terminal operation any restrictions that will raise the cost to Monsanto. For example, do not state we must hhv a certain number of tanks for quality control reasons. It may-be a vary real require ment. I v insist upon it, we need to know how much this requirement adds to our cost. After knowing this, th requirement may decrease in significance.
The following data is required for the Springfield plant operation - W. w, Latimer.
Hew capital requirements for each system. The filming of the capital expenditure if the expenditure can be programmed to match the yearly increase in forecasted throughput. Any capital write-offs that must be made if one system is adopted rather than the other.
Fixed and variable costs required to operate each system.
The two systems are
1 100% tan!; truck deliveries from Hew Havmn Hew Haven will always have a minimum inventory of 5M lbs. Therefore, th inventory at Springfield need only cover the -variability of the truck delivery system.
2* 100% tank car deliveries from Dow* The minimum inventory requirements at Springfield must cover th variability of the tank car operation between
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April 21, 1967
Dow and Springfield. Do not assume the service will be as good as the service presently avail able front the Texas City plant. Do not assume tank cars can be used for storage* If tank earn ,, must be' used for storage this must be known so the cost of the tank car fleet operation will include this added cost.
The following data 1 required from p, s. Bonham*8 group.
The tank car freight rate between Dow and Springfield. We need a projection on hew this rate will change between 1970 and 1985.
The fixed and variable cost for operating the VCM tank car fleet. The fleet sire may have to include cars that will b used for storage at the Springfield^plant. These cost data should take Into account the stepwise addition of cars to th fleet as the volumes delivered are increased. The method of financing the additions to the fleet must bo stated in order to calculate the effects of th flow of funds to Monsanto via depreciation*
The cost to Monsanto if the tank cars presently in use are disposed of should we go to 100/& tanker operation.
With th above data, we at Texas City will make a cash flow analysis of the difference in the money expenditures and money savings of the two systems. Prom this data wa will be able to state the tanicering cost that can be justified under several HOI criteria.
\J& would like to begin this final phase of the study no later than May 15, and hopefully by -Kay 22 have zi preliminary report oa the results of the study. '
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