There’s pretty much two most common “standard” designs for modern boxcars built in recent years:
50’ inside length, Plate F excess height “high-cube” cars with single plug doors (FBOX standard)
60’ inside length, Plate F excess height “high-cube” cars with double plug doors (TBOX standard)
And plenty of older cars from the nineties similar to the “FBOX” standard are rolling around, and also many many older late 1970s - early 1980s 50’ Plate C “standard” height single sliding door (RBOX standard) cars are still out in the pool of general service boxcars, including mid-seventies Plate B cars that have been rebuilt to raise their roofs and internal volume to Plate C or F cars. These have basically less than a decade of interchange service life left in them and will gradually be replaced by the newer plate F 50’ cars. (A car built in 1980 has a 50-year service life ending in 2030.)
In Monday’s (4/19/2021) Wall Street Journal digital edition there is a video titled “How the Pandemic Made Lumber America’s Hottest Commodity.” It’s paywalled.
The demand for lumber, and lumber products, has increased dramatically. People are buying free standing homes at a very increased pace. This includes new construction. They are also remodeling at a very increased pace. The demand curve for lumber, OSB, etc. has shifted significantly higher. This has naturally driven lumber prices up. The sawmills can only pump out so much.
The available rail car fleet capable of carrying lumber is what it is. It can, of course, be increased with new purchases. But you can’t buy a long-term asset for a short-term boom. The purchase analysis will focus on the projected discounted cash flows. The cash flows in the future will be discounted for three things. Once because a dollar ten years out is worth less than a dollar today. Second, because no one can see ten years out and know what the demand for lumber transport will be ten years from now. A rail car asset bought to carry lumber today could well be totally worthless in ten years. That isn’t good for an asset with a projected life of 40 years or so. The future cash flow must be discounted to account for that very real risk. Third, there are alternative uses for the capital investment. The potential returns foregone by buying a rail car instead of buying a peach orchard
In Monday’s (4/19/2021) Wall Street Journal digital edition there is a video titled “How the Pandemic Made Lumber America’s Hottest Commodity.” It’s paywalled.
The demand for lumber, and lumber products, has increased dramatically. People are buying free standing homes at a very increased pace. This includes new construction. They are also remodeling at a very increased pace. The demand curve for lumber, OSB, etc. has shifted significantly higher. This has naturally driven lumber prices up. The sawmills can only pump out so much.
The available rail car fleet capable of carrying lumber is what it is. It can, of course, be increased with new purchases. But you can’t buy a long-term asset for a short-term boom. The purchase analysis will focus on the projected discounted cash flows. The cash flows in the future will be discounted for three things. Once because a dollar ten years out is worth less than a dollar today. Second, because no one can see ten years out and know what the demand for lumber transport will be ten years from now. A rail car asset bought to carry lumber today could well be totally worthless in ten years. That isn’t good for an asset with a projected life of 40 years or so. The future cash flow must be discounted to account for that very real risk. Third, there are alternative use
To the biggest extent possible - Railroad are trying to minimize their investment in equipment used to haul product and give that responsibility to the user community.
You want your product hauled - you supply the rail car, container or trailer - the railroad will provide the the transportation.
I’ll more than agree with that. (except for the double stack) Going IM would reduce the investment risks since the equipment could be more readily repurposed if the lumber traffic went away. Reducing those risks will reduce the costs of acquiring new equipment. (Again, it doesn’t matter if a railroad or a 3rd party acquires the equipment. The risk costs are there and must be accounted for.)
Here’s my favorite, the curtain side. I’d use containers instead of trailers.
A sawmill (or paper mill) is a concentrated point of freight origin. So, an on-site intermodal terminal is a consideration. Bring in empty curtain side containers on spine cars. The shipper can load the containers while they are on the spine
SD60MAC9500
Maybe it’s time RR’s looked into shifting most building materials into the IM network. Add Flatracks into the mix as they can be double stacked, are relatively cheap to build, don’t carry the burden of boxcar investment, and can haul a multitude of items from lumber to steel products. Anything over size can use a flatcar.
I’ll more than agree with that. (except for the double stack) Going IM would reduce the investment risks since the equipment could be more readily repurposed if the lumber traffic went away. Reducing those risks will reduce the costs of acquiring new equipment. (Again, it doesn’t matter if a railroad or a 3rd party acquires the equipment. The risk costs are there and must be accounted for.)
Here’s my favorite, the curtain side. I’d use containers instead of trailers.
There used to be a company in Jefferson IA that loaded a 5 unit spine car. They had their own container lift vehicle. They would off load the empty containers, load them and then reload them on the spine car. IIRC, the load was soy products for export.
The local would spot and deliver the spine car. At the local’s home terminal the car would be sent west on the manifest that picked up and set out there. It’s been many years since this operation stopped. I think the company closed down.
Likely key word there being “export”. Load in containers at the source so they can be directly intermodal’ed overseas, rather than being trans-loaded from hoppers to containers at another facility.
For domestic rail shipping car-load traffic loads much more bulk commodity.
Lots of grain shippers do that here, but the containers are always trucked to and from the nearest intermodal terminals.
There is a customer up in Fort McMurray that ships 20’ containers on 89’ flatcars that move in regular carload freight service, not on intermodal trains. I’m not sure exactly what they ship, the waybills aren’t very clear, but I’ve always presumed it is some sort of specialty chemicals.
SD60MAC9500
Maybe it’s time RR’s looked into shifting most building materials into the IM network. Add Flatracks into the mix as they can be double stacked, are relatively cheap to build, don’t carry the burden of boxcar investment, and can haul a multitude of items from lumber to steel products. Anything over size can use a flatcar.
I’ll more than agree with that. (except for the double stack) Going IM would reduce the investment risks since the equipment could be more readily repurposed if the lumber traffic went away. Reducing those risks will reduce the costs of acquiring new equipment. (Again, it doesn’t matter if a railroad or a 3rd party acquires the equipment. The risk costs are there and must be accounted for.)
Here’s my favorite, the curtain side. I’d use containers instead of trailers.
The needed skill for the marketing department is to know the markets and how the railroad can profitably serve those markets. You can’t ad hoc the operation for every customer. Unfortunately, I don’t currently see much of that skill in the railroads’ marketing efforts.
Today’s marketing people don’t seem to know what a railroad can do. Along the way someone is inevitably going to say: “No, that can’t possibly work.” If the marketing folks don’t know better, and it seems they don’t, they’ll take that “No.”
There is a natural conflict between marketing and operations. This conflict can be beneficial, or it can be toxic. A weak, unknowledgeable marketing department makes it toxic.
Here’s a great example of what can be done with some creativity and knowledge. CN established an intermodal terminal in Chippewa Falls, WI.
The facility is focused on reloading containers to Asia with animal feed. Primarily distillers’ dried grains. These are what is left over after corn is turned in to ethanol for motor fuel.
SD60MAC9500
Maybe it’s time RR’s looked into shifting most building materials into the IM network. Add Flatracks into the mix as they can be double stacked, are relatively cheap to build, don’t carry the burden of boxcar investment, and can haul a multitude of items from lumber to steel products. Anything over size can use a flatcar.
I’ll more than agree with that. (except for the double stack) Going IM would reduce the investment risks since the equipment could be more readily repurposed if the lumber traffic went away. Reducing those risks will reduce the costs of acquiring new equipment. (Again, it doesn’t matter if a railroad or a 3rd party acquires the equipment. The risk costs are there and must be accounted for.)
Here’s my favorite, the curtain side. I’d use containers instead of trailers.
Our yard is 83 miles from the main Sioux City railyard. A driver could make 2 trips a day to us and sleep at home that night.
Since we are used to buying a railcar which is equivalent to about 4 trucks, we could easily do 4 containers at a time. Sometimes we get 2 cars at a time, = 8 containers.
A Sioux City intermodal ramp could also service Des Moines and Lincoln which are fair sized markets.
Sioux City is served by UP, BNSF and CN.
What potential freight could you haul out of Sioux City that doesn’t involve refrigerated cow and pig parts?
