40 MT TANKER VIABILITY REPORT

Introduction: Now a days transportation cost is overburdening to the manufacturing industries. Freight costs and fuel surcharges can substantially cut profits, and most companies are looking for ways to save money in these areas. In this perspective, we have submitted a report on viability of using Heavy tankers for transfer of molasses from Pudukottai plant & Pettavaithalai plant to Sivaganga Plant. Here in this report we have compared existing tankers (i.e. 27 MT) with 40 MT tankers. Current regular capacities of tankers in the market: There are two type of tankers availability in the market 1. Permanent carrier tankers 2. Trailer Mounted tankers. Available permanent carrier tankers capacities in market: 1. 9 KL 2. 12 KL Maximum permissible limit of this tanker is 12 KL or 11 MT. 3. 16 KL Maximum permissible limit of this tanker is 16 KL or 15 MT 4. 18 KL (Customized) 5. 20 KL - Maximum permissible limit of this tanker is 20 KL or 19 MT 6. 24 KL Maximum permissible limit of this tanker is 24 KL or 23 MT Trailer mounted tanker: 1. Currently as per RTO Policies, a trailer can carry upto 35 MT of load. Currently none one of the truckers are using this type of transport. 2. But these kinds of tankers are only available in Maharashtra & other northern parts of India. 3. M/s Bharat tanks and vessels are manufacturing these tankers. (Supporting document attached). We have asked for detailed description of tanker and commercial details too, waiting for feedback. 4. Currently some northern transferring CO2 gas. states are using these tankers for

Regional Transport Authority Rules (Tamilnadu): As per the current rules and policies, permanent carrier tankers must carry a maximum load of 22-23 MT. and a trailer can carry upto 35 MT at a time. It should not cross beyond that limit. If we cross that limit, officially they will seize permit of that vehicle. But unofficially permanent carrier tankers are carrying upto 30 MT, by bribing in check posts. Overloading Issues: Here we have taken one reference from article (Road statistics of india, problems & solutions) of what will be the impact due to overloading. One of the important factors responsible for poor roads is the problem of overloading by the users. A typical study carried out for a few State Highways indicated that as high as 12-40 percent of commercial vehicles exceeded the prescribed laden weight and the gross weight recorded were as high as 26-38 tonnes on the day of survey against permissible 22 tones. The damaging effect of overloaded vehicles on road varies to the fourth power of the axle weight. For example, 10 tones axle weight will cause 16 times the damage as would be caused by a single 5 tones axle weight. Inadequate road width means more number of repetitions of load on the same lane width. Government of India Initiatives for heavy trucks: On experimental basis, Oil industry is operating approx 4 to 5 TTs of capacities 35/40 KL and performance of the tank trucks has been found satisfactory. In view of the various advantages detailed above, induction of higher capacity new generation vehicles with latest safety features should be encouraged for transportation of POL products. However, prevailing Petroleum Rules, 2002 restrict carrying capacity of petroleum products to maximum of 25 KL. Oil Industry has been taking up the matter with the Ministry of Industries for making necessary amendment to Petroleum Rules, 2002 to permit higher capacity tank trucks. Necessary inputs and data sought by the Ministry have already been furnished. The approval is yet to be received. Appropriate review of the road conditions should also be undertaken before issuing permits to operate trucks of bigger capacity and

therefore at initial stages, only express highways should be considered for permitting higher capacity tank trucks. What other companies are doing in Tamilnadu?
1. Currently, M/s chemplast is using 24 KL tanker for transferring

molasses within plants by using M/s Murugan oil Corp tankers. As we know that molasses density is 1.25, so we can load upto 30 MT in 24 KL tanker. This is possible, but it is against the RTO policies.

Ashok Leyland 4023 XP (40 MT) Capacity New Transportation System Technical Specification of Trailer for 40 MT:
Ashok Leyland 4023 XP model is a trailer. It will come with Cabins with 6 tyre front arrangements. We need to attach 18 tyre tanker. For keeping 40 MT tankers, we need to modify trailer back by attaching 3 axles extra to the body. Vehicle *broacher attached as an annexure Capital required for Vehicle: 31 Lacs 1. Trailer Cost : Rs. 18 Lacs 2. Modification cost: Rs. 7 Lacs 3. Tanker Cost: Rs. 6 Lacs Features

Fuel Efficient 'H' Series CRS Engine G91 Suspended Cab Parabolic suspension in front Joggled frame with flanged fasteners

Applications

Market Load & Container Steel (Coils, Flats & Wires) Tip Trailer

Options

Radial Tyres Fully built Options-Flat bed trailer, Tip Trailer, Skeletal Trailer & Bulker Cabin Colour Options - Casablanca White/Traffic Blue

Specifications Engine Maximum Torque Clutch Transmission Front Axle Rear Axle Frame Suspension Brakes Parking Brakes Fuel tank Capacity Battery Tyres HA 57L 165 CRS BSIII

Maximum Power 225 HP @ 2500 rpm 800Nm@1400-1900 rpm 15" Dia RDC with Organic facing material 6 Speed Over drive gear box with FGR 6.72:1 Forged I Section reverse Elliot Fully Floating single speed Hypoid with RAR 6.83:1 Joggled frame with 5 cross members Front : Parabolic Rear : Semi elliptic multileaf Full Air Dual Line HLP brakes Flick valve operated pneumatic hand brake on rear wheels only 400 lts Cross Linked Poly Ethylene Tank (XLPE) 24V 130 AH 11.00 x 20 - 16 PR

Major Dimensions (in mm) Wheel Base Overall Length Overall Width Front Overhang Rear Overhang Front Track Rear Track Min. Ground Clearance Min. Turning Circle Dia Performance 3300 5670 2445 1470 900 2040 1870 260 13000

Max Speed in Top Gear Maximum Gradeability Weight (Kgs) Unladen Laden Front Axle Rear Axle Total 3450 2450 5900 6000 10200

91 KMPH 15%

40200(with tri axle trailer)

Other specifications: 1. Length of the body after attaching tanker will be 40 feet. 2. Total weight it can carry is 40 MT and vehicle body weight will be 12 MT. So we need to have a weigh bridge minimum capacity of 60 MT. 3. Total vehicle will consist 24 Wheels

38 MT tankers Costing Details: Sl . n o 1 Variable Name Sub Variab le Formulas Workings Per KM per MT cost 0.18

Tyre

Back

No of tyres used X per tyre cost = total cost of all tyres /life expectancy of tyre in Km= total cost of tyre per KM travelled PER KM PER MT = Total cost of tyre per KM travelled/ Total Weight per load

18 Nos X Rs. 22500 = Rs. 405000/600 00 Km = Rs. 6.75 per Km Rs. 6.75/ 37 MT = Rs. 0.18

Fronts

No of tyres used X per tyre cost = total cost of all tyres /life expectancy of tyre in Km= total cost of tyre per KM travelled PER KM PER MT = Total cost of tyre per KM travelled/ Total Weight

6 Nos X Rs. 22500 = Rs. 135000/250 00 Km = Rs. 5.4 per Km Rs. 5.4/37 MT = Rs. 0.15

0.15

per load 2 Driver Wages 2 drivers Needed Drivers Wage per Trip/ total load per trip = Driver wages per MT Driver wages per MT/total Kms per load 3 Diesel Per Litre Diesel Cost/Average Mileage = Diesel cost per Km Diesel cost per Km/total load weight per trip 4 Insuranc e, Maintena nce & Road Tax Other Expenses Loan amount RTO Mamool, Traffic Police & Supervisor salary Loan amount paid per month/Total Vehicle movement per month in Kms Loan amount per month per Km/ total weight per load Total Assumptions made for calculations per KM per MT:
i.

Rs. 1700 / 37 MT = Rs. 45.95/ MT Rs. 45.95/110 Km = 0.42 Rs. 45 / 2.25 Km/lit = Rs. 20 Km Rs. 20/ 37 MT = Rs. 0.54

0.42

0.54

0.20

0.10

Rs. 66340/2800 Km = Rs. 23.69 Rs. 23.69/37 MT = Rs. 0.64

0.64

2.23

Each tyre cost is Rs. 22500 Life expectancy of back tyre is 60000 Km Life expectancy of front tyre is 25000 Km Driver Wages is Rs. 1700 per Trip Per litre Diesel Cost Rs. 45 Average mileage of 4023 XP with load will be 2.25 Km/ Litre

ii. iii. iv. v. vi.

vii. viii.

No of loads per month is 28, so total vehicle movement in a month is 2800 KM Expected Loan amount per month on the basis of capital expenditure: Rs.66340/month road price: Rs. invested by Rs. 6 Lacs given by Rs. 25 interest: 6.18%

Vehicle on 31 Lacs, Initial amount borrower: Approx Loan Amount Lacs Rate of (for 4 Years)

Total Interest = Rs. 25 Lacs * 6.18 %* 4 years = Rs. 6.18 Lacs Loan amount paid per month = (Total Loan + Total Interest) / 47 months 31.18 Lacs/ 47 months Rs. 66340 / Month

Ashok Leyland 2516 (27 MT) Capacity Old Transportation system Technical Specification of Trailer for 40 MT:

Capital required for Vehicle: 21 Lacs (Rs. 2102267)

1.

Vehicle cost + chassis cost: Rs. 15.73 Lacs Tanker and other expenditure: Rs. 5.29 Lacs

2.

Other Specifications: 1. Length of the body after attaching tanker will be 25 feet

2. Total weight it can carry is 27 MT and vehicle body weight will be 10 MT. So we need to have a weigh bridge minimum capacity of 40 MT.

3.

Total vehicle will consist 10 Wheels

27 MT Tanker Costing Details: Sl . n o 1 Variable Name Sub Variab le Formulas Workings Per KM per MT cost 0.15

Tyre

Back

No of tyres used X per tyre cost = total cost of all tyres /life expectancy of tyre in Km= total cost of tyre per KM travelled PER KM PER MT = Total cost of tyre per KM travelled/ Total Weight per load

8 Nos X Rs. 22500 = Rs. 180000/450 00 Km = Rs. 4 per Km Rs. 4/27 MT = Rs. 0.15

Fronts

No of tyres used X per tyre cost = total cost of all tyres /life expectancy of tyre in Km= total cost of tyre per KM travelled PER KM PER MT = Total cost of tyre per KM travelled/ Total Weight per load

2 Nos X Rs. 22500 = Rs. 45000/2500 0 Km = Rs. 1.8 per Km Rs. 1.8/27 MT = Rs. 0.06

0.06

Driver Wages

Driver + Cleaner

Drivers Wage per Trip/ total load per trip = Driver wages per MT Driver wages per MT/total Kms per load

Rs. 950 / 27 MT = Rs. 35.18 / MT Rs. 35.18/110 Km = 0.31 Rs. 45 / 3.5 Km/lit = Rs. 12.87 Km Rs. 12.87/ 27 MT = Rs. 0.48

0.31

Diesel

Per Litre Diesel Cost/Average Mileage = Diesel cost per Km Diesel cost per Km/total load weight per trip

0.48

Insuranc e,

0.20

Maintena nce & Road Tax 5 Other Expenses Loan amount RTO Mamool, Traffic Police & Supervisor salary Loan amount paid per month/Total Vehicle movement per month in Kms Loan amount per month per Km/ total weight per load Total Assumptions made for calculations per KM per MT: i.
ii.

0.10

Rs. 42000/2800 Km = Rs. 23.69 Rs. 15/27 MT = Rs. 0.64

0.64

1.86

Each tyre cost is Rs. 22500 Life expectancy of back tyre is 45000 Km Life expectancy of front tyre is 25000 Km Driver Wages is Rs. 700 per Trip & Cleaner charges is Rs. 250 per trip Per litre Diesel Cost Rs. 45 Average mileage of 2516 model with load will be 3.5 Km/ Litre (KPL) No of loads per month is 28, so total vehicle movement in a month is 2800 KM Expected Loan amount per month on the basis of capital expenditure: Rs.42000/month Vehicle on road price: Rs. 21 Lacs, Initial amount invested by borrower: Approx Rs. 5.29 Lacs Loan Amount given by Rs. 15.73 Lacs Rate of interest: (for 4 Years) Total Interest = Rs. 15.73 Lacs *6.18 %* 4 years = Rs. 3.89 Lacs

iii.
iv.

v.
vi.

vii.
viii.

Loan amount paid per month = (Total Loan + Total Interest) / 47 months 19.62 Lacs / 47 months Rs. 41740 / Month = Aprox Rs. 42000 / Month

Overall comparison of both 27 MT Vs 38 MT: Variable Name Avg. Mileage Full load Mileage Empty Load Mileage Costing structure per Km Per MT 1. Tyre 2. Driver bata 3. Diesel 4. Insurance, maintenance & Road Tax 5. Other Expenses 6. Loan amount Paid to bank Total Trailer Length Weigh Bridge Required 0.21 0.31 0.48 0.20 0.33 0.42 0.54 0.20 21 KL Tanker ( 27 MT) 3 KPL (Km per Ltr) 3 KPL 3.75 KPL 30 KL Tanker (37 MT) 2.25 KPL 2 KPL 2.5 KPL

0.10 0.56 1.86 25 Feet More than 40 MT

0.10 0.64 2.23 40 Feet More than 55 MT

E.I.D Parry (India) Limited Scenario:

Every day EID Parry (India) ltd will be transferring approximately 250 - 300 MT of molasses to our Sivaganga plant from Pudukottai plant & Pettavaithalai plant on 60:40 ratio basis. * Calculation provided below Sivaganga Per day requirement is 60000 Ltr & No. Of days operational days in a year 300 & conversion factor for Molasses to alcohol will be 4:1 (i.e. 1 MT of molasses will gives 250 Ltr of alcohol). Molasses Requirement to Sivaganga (MT) = = Per Day production * No. of days / Conversion factor = (60000 * 300) / 250 = 72000 MT per annum. So Sivaganga Plant requires 250 300 MT of molasses required. It has to be taken from Pettavaithalai & Pudukottai plant on 40:60 ratios respectively. So approximately, we will be transferring 150 MT from Pudukottai & 100 MT Pettavaithalai plant respectively. We are currently using 21 KL (27 MT) tanker to transport molasses from Pudukottai & Pettavaithalai to Sivaganga plant. No. of trucks required per day: With these truck capacities, every day we may need 9 10 Tankers to transport molasses. If we are using 30 KL (38 MT) Tanker we may need 6 7 loads per day.

Conclusion:
Project Viability: Here is the cost comparison detail for both trucks: Cost parameters Per day Sivaganga molasses requirement Per total No. Of loads Required Per Trip Cost per load (calculation given below) Total Expenditure per day for transportation of molasses Weigh bridge 20 KL (27 MT) 250 MT Approx 10 Rs. 5022 30 KL (38 MT) 250 MT Approx 7 Rs. 8474

Rs. 50220

Rs. 59318

Existing Weighbridge system is enough

New weighbridge has to be build for the new tankers

Per trip cost per load = Per Km per MT cost * Vehicle weight * Destination distance For 27 MT tanker per trip cost = 1.86 * 27 * 100 = Rs. 5022 For 38 MT tanker per trip cost = 2.23 * 38 * 100 = Rs. 8474

Per day Total expenditure for molasses transfer = Per Trip Cost * No. Loads required per day For 27 MT Total expenditure per day = 5022 * 10 = Rs. 50220 For 38 MT total expenditure per day = 8474 * 7 = Rs. 59318

By seeing this cost sheet, we are incurring an additional cost per day is Rs. 9098 by implementing 38 MT tanker without considering Capital expenditure and new weigh bridge cost.

Other factors: 1. Total capital expenditure for 7 trucks will be 217 Lacs (each truck 31 Lacs) 2. We do not have any weigh bridges nearby to weigh these tankers. These kind of weigh bridges is only available in cement factories.
3. By implementing these trucks we need to go for new weigh bridges,

which will cost around 25 Lacs (as per Mr. Prakash mail). This weigh bridge has to weigh a minimum of 60 MT & length has to be above 38 40 feet.
4. None of the transporter is having 38 MT tankers and these tankers

will be a customised tankers for E.I.D Parry (India) Limited. Transporter cannot use these tankers for other industries.
5. So supplier will insist us to take these tankers on monthly rental basis

as against our old system of Per KM per MT cost. Monthly hiring charges will be more comparing to per KM per MT. And we cannot even use these tankers for other materials.

Bottom Line: After considering all these variables, we may understand that 38 MT tanker project viability is not satisfying our basis need of reducing transporting cost.

Reference:
1. Case study on Design Improvement: promoting new generation tank

trucks
2. Road statistics of india, problems & solutions by SB DIKSHIT, State

Quality Monitor, U.P.R.R.D.A

3. http://bharattanks.net/LPG_Product.htm#lpg_truck_type 4. http://3.bp.blogspot.com/-HqYZ7E5DJTA/TbH-

2s0RNSI/AAAAAAAAA5E/aZ0ozcYoW74/s1600/Grain+silo+supply+truc ks+3.jpg 5. National Disaster Management Guidelines Strengthening of safety and security for transportation of POL Tankers July 2010
6. http://www.kailashcarriers.com/about_us.html

Attachments Provided: 1. Technical Specification & broacher of U 4023 TT vehicle included 2. Technical specification & Broacher of 2516 Vehicle included. 3. Article on national disaster management guidelines strengthening safety and security for transportation of POL Tankers. 4. Article on government new initiative on new design tankers. 5. Article on road statistics of India, problems & Solutions. 6. Web page on tanker specifications made by M/s Bharat Tankers and vessels.

7. Examples of other industry practices in India & abroad.

8. M/s SGM Transportation Provided HDFC loan statements for his new vehicle loan. 9. Working sheets for 21 KL & 30 KL (39 MT) tankers (Information provided by M/s SGM Transportation)