Introduction

Our firm was engaged to assess the feasibility of establishing a rail-connected aggregate supply chain from a Georgia quarry to the competitive Florida market. The project required a comprehensive analysis of Class 1 Railroad infrastructure requirements, market positioning, competitive dynamics, and logistics optimization. With the client looking to potentially disrupt the well-established Southeast aggregate market, our team thoroughly assessed rail infrastructure options, capital requirements, and operational feasibility. The analysis covered everything from site design and connection challenges to rail car fleet requirements and market positioning, ultimately providing the client with actionable insights for a potential $21-23 million capital investment decision.

At A Glance

The consulting team delivered a comprehensive rail supply chain feasibility assessment that enabled the client to make an informed go/no-go decision on a significant capital investment to enter the competitive Florida aggregate market.

Requirements

  • Detailed analysis of Class 1 Railroad infrastructure, including interchange, staging, and working track design specifications
  • Market assessment of competitive dynamics and connection challenges in the Southeast aggregate market
  • Complete CAPEX/OPEX modeling with rail car fleet optimization and project timeline development

The Challenge

The client, operating a quarry in Georgia, sought to evaluate the feasibility of establishing a rail connection to a Class 1 Railroad to transport aggregates to markets in Florida. This presented several significant challenges:

First, the physical site posed considerable constraints. The quarry location required complex rail design considerations, including navigating elevation differences, creating sufficient storage capacity for up to 600 railcars, and establishing a viable connection to the Class 1 Railroad mainline near a creek viaduct. Initial site assessments indicated approximately $17-19 million in infrastructure costs plus an additional $4 million for the mainline connection.

Second, market dynamics presented competitive challenges. The Florida aggregate market was already well-served by established rail providers operating large rail-served quarries in the region. Additionally, the client’s target customers were not currently rail-served, requiring either costly rail build-ins or the establishment of new transload terminals.

Finally, logistical challenges were substantial. The operation would require a fleet of 800-1,600 railcars with acquisition costs ranging from $25-207 million, depending on volume and fleet turnover assumptions. The earliest projected shipping date would be January 2026, requiring approximately 20 months of development time.

PraxiChain Solution

The team developed a multi-phase approach to thoroughly assess feasibility and prepare for implementation:

  • Conducted comprehensive assessment of the Class 1 Railroad aggregate rail market, specifically analyzing volumes moving to Florida
  • Executed detailed site analysis, including track capacity modeling, storage requirements, and connection point feasibility
  • Developed precise CAPEX estimates for rail infrastructure ($17-19M) and connection requirements ($4M)
  • Created detailed car fleet modeling to determine the optimal fleet size and acquisition strategy
  • Drafted project timeline with critical path analysis for design, permitting, construction, and railcar acquisition
  • Evaluated target customer base and competitive positioning against established players
  • Prepared Phase II engagement plan to secure Class 1 Railroad support and refine the commercial model

Results

Our assessment provided the client with actionable intelligence to make an informed go/no-go decision about entering the competitive aggregate market via rail. The analysis identified several critical factors for consideration:

The site design was feasible but required significant modification of initial concepts. The firm’s rail experts identified inadequate storage capacity (294 vs. 400-600 cars needed) and insufficient switch lead length (1,900′ vs. 2,250′ optimal) in early designs. The comprehensive site assessment provided clear parameters for a viable rail operation requiring approximately $21-23M in total capital investment.

Market analysis revealed both challenges and opportunities. While potential annual volumes to target destinations approached 1 million tons, competitive positioning would be difficult given the existing rail-served competition and the need for customer rail build-ins. However, our consulting team identified an opportunity as three target customer sites scheduled to complete rail connections by the end of 2024.

The assessment provided a clear roadmap for the next steps, including detailed recommendations for Phase II engagement with the Class 1 Railroad to secure commercial support, refine operating models, and finalize fleet acquisition strategies. By identifying both red flags and potential solutions, Our firm delivered critical insights that allowed the client to confidently evaluate this significant strategic opportunity in a challenging competitive landscape.