Car Ownership

CE 515 Railroad Engineering
Car Ownership and Distribution
Source: Armstrong, Ch 10
“Transportation exists to conquer space and time -”
Railroad Car Ownership?
• Balance
– Too few = potential loss of business
– Too many = more expenses
• Car ownership/upkeep is 15% of expenses
Originating & Terminating Carriers
• Originating carrier
– Produce more products than consume
– Usually short of cars
• Causes need to lease them
• Terminating Carriers
– Consume more than produce
– Have many “emptys”
Private Car Ownership
• Railroads encourage utilities to own their own
– In exchange, get reduced freight rates
– Example: power plant having their own coal cars
• Reduces railroads’ new car investments and
maintenance costs
• Initials end in “X”
Car Rental Systems
• Bilateral Agreements
– Use of another railroad’s cars
– Terms and rate are private
– Rail Inc (subsidy of AAR) keeps track of all
“interchanges” and tracks balances
• Per Diem
– Actually per hour
– How bilateral agreements are charged
• Need to be high enough to have
return to owner
• Low enough to encourage the
railroad to keep it long enough
to find a return load
– Will improve overall car use
• Used to be regulated by ICC
• Equipment Assets Management Working
– Recommend rates
– Members represent all rail carriers
• Rates established using formula involving
original cost and age of car
– Examples:
• Elderly 50’ plain boxcar:
$0.18/hr + $0.054/mile
• Newer multilevel 89’ flatcar:
$1.75/hr +
Service and Distribution Rules
• Objectives
1. Ensure well-timed movement of empties
2. Reduce empty car mileage
• Example:
– Empties can now take detours to be loaded
instead of being always being sent directly back
Assigned Service Cars
• Cover specific products between specific
shippers & consignees
• Car ownership is often shared by different RR’s
• Cars almost always return empty
Leasing Industry Leaders
• For the most part is comprises of
small/medium sized firms
– Specialize in one or two types of cars
• Also large companies
– General Electric Railcar Services Corp.
• Largest fleet in the industry
– GATX Financial Corp
Railbox & Railgon
• TTX Corp.
– Owned by major railroads
– Own standardized plain cars for use by railroads
– lower rates
• Railbox (RBOX) : plain box cars
• Railgon (GONX) : plain gondolas
Railgon picture
• Universal Machine Language Equipment
• Date file updated daily
• Shows availability for all cars
• Maintained by Rail Inc
– Telerail Automated Information Network
– Keeps location of every freight car
– Covers all railroad interchanges in the US and
– Shipper Assist Message
– Lets shippers receive data from cars carrying their
Car Route Optimization
• AAR continuously does studies to improve car use
• Database the waybills of 1% of all trains
– Over 200,00 per year
• Generate computer programs to evaluate the
effect of car service
•Armstrong, The Railroad: What It IS, What It Does

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