Supply Chain Optimization

Rail Policies Hurt Shortlines and Boxcar Users —The Boxcar Cliff

The fleet of boxcars is declining and will continue to get smaller as more boxcars reach the end of their 50-year useful life.
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One company, TTX, owned by the major railroads, is building some cars, but others have been frightened off by what could only be described as “restrictive pricing.”
  • The rate for non-TTX cars is the lowest negotiated rate in effect for the quarter in which the car was built.  This rule started in 1994 with the ICC and has been carried forward.
  • Any two railroads can agree on an ultra-low rate for a car
  • Result:  Cars owned by TTX get ~4X the monthly revenue of investor-owned cars
Who is hurt? — Shortlines, users, you and I.