Hi All,
I use boxcar as a catch all term…this could apply to any kind of freight car.
I was just wondering (and I know this may be wierd but), is it possible to own a freight car and charge the Railroads or Companies (customers) to use it?
For instance, could I (or a group of investors) purchase a reefer car then collect everytime a vegetable company uses it to ship produce to the East Coast?
I’ve tried Google searches, Forum searches and it all leads to nothing or freight car manufacturers. If I (or my group) were going to buy, I was thinking about something currently on the rails (used), so a manufacturer is no good to me.
Any guesses on how much capital would be needed?
Am I nuts here? I mean, I see all these Leased freight units now, so I was just thinkin’…
Can anyone help me here? Web sites? Phone numbers?
Here’s how it worked. A small shortline “bought” a few hundred boxcars. They immediately (with a leasing company) found dentists and other investors to pony up 40 grand, or so, for their own boxcar.
When the car got used, a percentage of the freight revenue came back to the leasing company, who handled all the revenue and expenses (like getting new brake shoes).
The investor, in a high tax bracket, got to write off a great deal of his investment, as a tax credit (which is a dollar-for-dollar savings), and as depreciation (which benefits investors in high tax brackets).
But the key was the per-diem charge. As long as the boxcar was off the home road (the shortline), major railroads paid a hefty per diem to the owner. As long as there was a shortage of boxcars, the major railroad welcomed the extra cars, and just added the per diem. But, as soon as a glut of boxcars occurred, the majors quickly sent the boxcars back to the shortline, rather than pay the per diem.
Tax laws, and tax rates changed, and most of the investors abandoned their boxcars. A few are still rolling, most have been scrapped, or sold outright to the majors.
Most railcar leasing is done by big companies with the ability to handle all aspects involved. Major players include GE, First Union, UTLX, Procor, and other manufacturers.
One would have to be able to handle the repairs and maintennace…something you probably wouldnt want to involved with.
There was another thread about this just recently, something in regards to “Rate of pay” or something.
As modorney stated, the home railway will always try and use their own equipment first, because it costs them less money.
Not a good way to make money, in fact you most likely won’t make any at all, but it always sounded like fun to me to own a piece of rolling stock and watch where it goes.
In regards to that link, I wrongly assumed at “MR” was a reporting mark of Montana RailLink, it is in fact a reporting mark of the McCloud Railway Company.
That’s interesting to me because I see the “MR” reporting mark all the time in my area on boxcars.
Not too many individuals own rolling stock anymore, but there are numerous leasing companies from large to small that continue to finance their own lease fleets of various sizes. These range from the colossus GE Railcar, to HELM Leasing, DJ Joseph, and many smaller ones. Take a look in sites like www.railmart.com, www.railroaddata.com, www.railserve.com to find some of the companies out there.
As noted above, the days of incentive per diem are long gone. Privately owned rail cars are only entitled to mileage payments and most are owned by utilities, tank car companies, plastics companies or others with a need to conserve transportation costs as an industry. Cars with railroad marks are entitled to both per diem and mileage payments. Such payments are set within limits prescribed by the AAR. It is very difficult for someone not in the railroad business to break even in this business as they have no access to railroad marks. Such access is contractual in nature and is not easily obtained. Many of the larger leasing companies even own their own railroads.
You’d be far better investing in things other than railroad cars, unless you really want a nice playhouse for the backyard.
Some of them come fairly frequently to Scholle in Merced, CA. It seems like they usually go empty to Port Coquitlam, BC. I think they must be bringing down cardboard. They seem to be in the same group with a bunch of SRY and BNSF boxcars. I have notice FBOX in there also.
I wonder if these MR boxcars have ever been on McCloud Railroad?
The SRY (Southern Railway of British Columbia) is a Class III that runs from New Westminster to Chilliwack, under 100 miles of mainline.
The SRY is a sister railway to Montana Rail Link, which is why I assumed “MR” was a reporting mark for MRL, I figured the SRY was just using MR equipment.
Turns out all this time MR has nothing to do with the SRY or MRL except that those two railways use McCloud Railroad equipment.
I would have to think they are on some sort of a long term lease, as there are usually a good number of them.