Transload facility operator finds a new way to serve its customers by offering mobile repair for their railcars in the Bakken.
Kevin Goins kept hearing from his customers at Strobel-Starostka Transfer (SST) that they were losing money because it was taking too long for their railcars to be repaired. So like any good entrepreneur, the SST president launched his own business — Freedom Railcar Solutions — to fill the gap.
Since it opened nearly two years ago, Freedom Railcar has set itself apart from its competitors by providing on-site repair and maintenance services in the Bakken Shale and Powder River Basin using a mobile repair unit. Previously, technicians removed a car needing repair from the line and transported it offsite for repair, which took an estimated 90 days since many repair shops were in other states. If a crude oil tank car is out of service for 90 days, companies lose an estimated $100,000 in revenue, cleaning, repairs and freight charges, Goins says.
“Customers were telling me they had too many assets just sitting on the tracks and they were tired of waiting for companies to come out, haul them back to the yard and repair them,” he says. “I saw the opportunity to create a business to go out there and just repair them. We’re getting a lot of positive feedback from customers.”
SST, which operates transload facilities in North Dakota and Wyoming, is a nice fit business-wise with Freedom Railcar, Goins says. He teamed up with another industry veteran, Don Walsh, to launch Freedom Railcar.
The company’s first six to eight months were spent getting necessary industry approvals to do the repairs, but since then they’ve been busy fixing railcars and getting them back into service as quickly as possible.
MOBILE SERVICES
The mobile repair units are located in Palermo, North Dakota, and Fort Laramie, Wyoming, and staffed by certified technicians. The on-site services offered include the repair of vacuum-relief valves, manway lids and eyebolts, load valves, bottom outlet valve handles, brake parts, stencils, AEI tags and safety appliances.
Goins estimates that 75 to 80 percent of “what ails a car” can be fixed with the mobile service. “A lot of times, if the car is empty we can repair it while it’s still linked up to other cars – we don’t need to move it to a sideline or anything,” he says. “That cuts down the amount of time the repair takes.”
While the mobile repair units serve a 250-mile radius around their hubs in North Dakota and Wyoming, Freedom Railcar has plans to add units in Windsor, Colorado, and Edmonton, Alberta, by the end of the year. If service is needed outside of its usual coverage area, Freedom Railcar is also willing to send its mobile unit to a railcar’s location for an added fee.
“The mobile repair unit is like a mini-repair shop,” Goins says. “We have all the necessary tools, including welding supplies and a small hoisting crane. Companies no longer need to send their cars away for repairs.”
That’s something customers appreciate. Timothy Holan of Mercuria Energy Trading says his company is pleased with how Freedom Railcar has handled repairs for its railcars. “The quality and timeliness of their repairs ensures we can maximize our fleet utilization and have it done at a competitive price,” he says.
WORKING CLOSELY WITH CUSTOMERS
When railcar repairs are a bit more complicated, such as bringing older cars up to new safety rules, Goins says the railcar is unhooked and moved to an empty rail spur where it can be worked on.
“Some cars need to be retrofitted, and we work closely with our customers on when we can take them off and make the repairs,” Goins says. “There’s a difference in being proactive and reactive. Proactive means you’re taking the steps before you’re told to do it or before there’s a problem, while reactive means you’re doing something after the fact. We always try to be proactive and work with our clients on making sure they are being proactive in their repairs.”
Since the railcars carry oil, there’s a lot of attention paid to safety and making sure the cars are well-equipped to do their job.
“Safety is always paramount. We work hand in hand with our clients on safety,” Goins says. “We always take extra steps and precautions and won’t do anything that will harm the environment or the workers.”
While most companies doing business with the oil industry have experienced a slowdown as the average price of crude oil falls, Freedom Railcar is not one of them.
“We’ve actually been pretty busy because companies are seeing they can take some railcars out of service and get them repaired or retrofitted more easily right now,” Goins says.
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