I got a question about locomotives that a part of leasing companys, (HLCX, AGTX, LMSX and so on). Are they really companys? Where do they go or where are they stored when not in use? and does anybody know when the first company started to do this type of thing?
Andrew Weise.
Well, one of the pioneers of locomotive leasing I BELIEVE was GATX. GSCX now, but im not sure where they are when not stored. Larry’s Truck and Electric has a scrap yard where im sure they would service their lease fleet.
Alec
RELCo (Railway Equipment Leasing Company) has been around a LONG time - had high-hood ALCOs in their lease fleet at one time. They provided locomotives to a lot of elevators/other small operators. I would surely think they’d been one of the first, if not the first of the locomotive leasing companies.
OK, the leasing business started back when Relco began leasing out switchers to industrial lines that didn’t care to deal with the task of maintaining a locomotive. Relco took care of their locomotives for their customers and won a lot of respect and happy customers. Now, railroads have no desire to own locomotives that might sit around doing nothing to offset their $2-4 Million cost! So, the major players Helm, GATX/GSCX, and Connell will lease out old or rebuilt SD40s SD40-2s (both real and what I call counterfeit, i.e., rebuilds),SD45s, SD50s,SD60s, and C30-7s. Some outfits (CEFX) buy new units to lease out to capital short railroads, or lines that wi***o pay only for the power their locomotives use. Power-by- the-hour is a wide spread trend, which began big time when BN leased new SD60s from Oakway. BNSF still uses them, so they must be happy with the arrangement, and other carriers are too, notably CSX and CP.
Most of the major players in the leasing market are banks or financial service firms, and their leasing operations with locomotives are not all that different than long and short-term leasing of commercial airliners to the various airlines by International Lease Finance and Guinness Peat Aviation.
Course railroads used to lease engines to each other way back.
thank you all, although I’m still not sure about were they store engines. Sad it seems like railroads just arent what they used to be, they have become too corporate. Railroads don’t want to do local switching, and own and maintain their own locomotives. I can see why they would want to do that, It’s logical, but I’ll bet in the next fifty years railroad will operate in no way like the 1970s and earlier.
Of course they own and mantain their own locomotives!
Max, That’s not nessasarily true. There has been a trend lately to buy into maintainance contracts on new locomotives that require the manufacture to maintain them in the railroads shops. In that case EMD or GE maintain them, not the railroads.
There are also shortlines that have no facilities for maintaining there own equiptment.
Ok, I honestly forgot about that. But they still, and will always OWN their own loco’s.
Hey Max, I’m not trying to argue with you, I’m just pointing out a few things. Most locos, even when painted in the railroads colors, are usually on long term lease and are owned by various financial institutions. The actual owner is sometimes indicated at the front of the frame of the loco. After the lease is up they sometimes opt to buy the units outright. The terms for this sale after the lease expires are sometimes defined by the original lease agreement. If the railroad does not want to buy the units outright after the lease is up, then they are returned to the owner and will most likely end up on short term lease to another railroad or traded in to the builder (EMD,GE) for newer units.
A recent example of this is the (I beleive) SD90MAC’s turned in by UP. I saw 3 of them at Midwest Car in primer about to be painted in KCS colors. Many railroads want to retain there cash for badly needed capital improvements and leasing helps them do this. I doubt if it will take fifty years for more railroads to lease engines than own them outright if they do not do so already.[2c] as always ENJOY.
I know your not.
Well, ill admit, I learned something new today.
Buuuuuut, Is it mainly the new loco’s on lease, dont they own outright all the SD40-2’s and such?
The SD40-2 and older locos are most likely owned by the railroads by now.
Ok. So I was kinda right[:D]
Max… most all of our locomotives are leased. The 60’s the 15’s the 38’s… we maintain all of them.
J. Paul Getty (one of the first oil billionaires) is reported to have once said, “Own what appreciates, lease what depreciates”. While this may be a bit simplistic, there is a grain of truth in it, which may explain why airlines, railroads and even shipping lines have much of their equipment in long-term leases rather than direct ownership.
IBM was often taken to task in the past for insisting that its customers lease rather than buy mainframe computers, but when you consider how quickly computers become obsolescent, they may have been on the right track.
Dude, they are not turning UP SD90MAC’s into KCS, are they? KCS is really gettin into the new big power thing. I’m trembling.
Those ex-UP units are all over the engine yard here in Kansas City. With some already in primer and others with a line thru the Union Pacific lettering I would say it will not be long till they are all Grey with Red lettering. The question is whether they are KSC or TFM?[?] As always ENJOY