Is the decision to rebuild verses trading in and buying new driven by more than just cost? I’m thinking about CP’s recent decision to have a large number of its older SD40-2 locomotives rebuilt (i.e. the ECO SD30 units)…
I’d opine that it’s all about the money in the end.
While it is all about money in the end, there are major factors to be considerd. Service life, service availability, gains of new vs old technologies, a 20-30-or whatever frame is still 20-30-or whatever old no matter what is done inside, cost effectiveness for traffic involved, finance availability and terms. . Initial out of pocket cost is not always the only factor.
When it comes to the major carriers rebuilding 4 axle locomotives - it’s about track structure in specific service locations no being able to handle 6 axle engines - and the manufacturers are not building new 4 axle engines.
Correction, the builders are not SELLING any new low to medium horsepower locomotives because of the cost. CP’s rebuild of GP7’s and GP9’s to 22ECO’s is as close as your going to get to new. The other GP40 and SD40’s are “frame off” restorations using at least tier 0 rebuild kits for the 645’s. GE has a ES23DC design on paper only, that reuses the frame trucks and traction motors. They need to build some demonstrators like EMD did.
Almost always all about the money, except for the 4-axle needs per BaltACD and the like, maybe eliminating the last of an oddball model, or perpetuating a substantial fleet with an ample parts supply and equipment and personnel to work on them, an owned or captive shop to do the work in, etc. Sometimes it’s about a cash shortage that forces a cheaper up-front outlay, or a tax credit that skews the result (N&W’s sudden dieselization), etc.
And it’s about all the money, too - all of the elements or components that go into the lifetime cost cycle - the first or capital costs of the rebuild or purchase, fuel usage and economy, service life and depreciation, tax credits, complying with applicable environmental laws, reliability of the engine, type and performance of the traction motors (AC vs. DC), reliability of the solid frame (SD40’s excel at that), cost and maintenance of accessories, upgrading to start-of-the art controls, amenities for the crew, safety cab requirements, etc.
And there are in-betweens - re-using or cannibalizing parts from older units to be used in new ones, typically the frame and trucks, etc.
- Paul North.
Its interesting that the builders don’t respond with newer models. Back in the 70s and 80s several carriers (ICG was the most prominent as I recall) were rebuilding their GP9 fleet. EMD apparently wasn’t too happy about that so they introduced the GP15, a new locomotive that would compete with the rebuilds. When a railroad in affect says “I want to rebuild 350 30 to 40 year old locomotives because your current new offerings aren’t competitive”…that says alot.
Maybe EMD should take a page from VW…take an old model and modernize it. Like the SD40-2…build a modernized version of that and make it so the railroads can easily trade in their old power towards the purchase.
Trust me if say the UP NS CSX or BNSF called either EMD or GE and said we need 300 4 axle AC equipped 2000 HP Tier 3 Units with Spartan Cabs and we need them by the end of Next year. Here would be the Loco builders answer What Paint scheme you want them in and how fast do you want delivery of the 1st units. Just because they are not Building them now does not mean if the Class ones called them with a HUGE order they would NOT build them. It is called the CUSTOMER IS ALWAYS RIGHT.
Of course CP is getting essentially new locomotives from Progress Rail (EMD), especially the 4-axle locomotives, just the trucks and traction motor cores reused.
Yep, they’re for all intents and purposes brand new 4 axle EMD locomotives. Just enough components from the trade ins are going to be used to qualify for tax purposes as rebuilds. It’s no different than any other time when EMD accepted trade-ins. It was almost always done, in part, for tax purposes so the new unit would be considered a rebuild. Yet we don’t go around talking about something like a late model Union Pacific E9 from the early 1960’s being a rebuilt E7 (Even though technically, that’s how it was viewed by the accountants and is how the IRS would’ve viewed them). It was just a new E9 back then just like how these CPR units will be new GP22ECO’s.
Weird to think that if another company like BNSF traded in something like one of their GP30 rebuilds that we could have a brand EMD 4 axle locomotive in 2011 riding on the trucks of a 70 year old EMD FT (Many EMD Geeps from companies that traded in FT’s ended up recycling the trucks).
Yup. The reason you buy new ones is the economic return on the dollars you shell out. Replacement ratio, fuel and maintenance costs are the big drivers. With four axle units used in non-mainline service, the replacement ratio is one for one and t, the total amount of fuel used is small, so the dollar value of fuel savings is smallish.
There are generally no structural issues with the current four axle EMD fleet, so rebuilding is a good option.
Here at the frugal railroad we are currently rebuilding our SD60 fleet into 4000 HP SD60E locomotives entirely due to cost. Below is copied from our BizNS magazine located on our www.nscorp.com website:
Juniata’s rebuild program is generating multiple benefits for NS’ business. Faulkner describes it as “recycling at its greatest,” because the shop is adding 15 to 20 years of reliable service to old engines that might otherwise be scrapped. As part of the rebuild, the shop reconditions and reuses the steel platforms, wheel assemblies, traction motor frames, and engine blocks. In addition to environmental benefits derived from reusing the old steel, the program is a money saver. The rebuilds cost NS about half as much as buying a new DC locomotive. The rebuilt engines feature enhancements that put them on par with new engines in terms of fuel efficiency and reduced emissions.
Perhaps the most ambitious of the rebuilds is the SD60E road locomotive, designed to pull double-stack intermodal trains. These units are reusing the frames of 1980s SD60 locomotives; the “E” designation stands for enhanced. Two key improvements are the addition of electronic fuel-injection and a dual engine-cooling system developed at Juniata. This “split-cooling” system is unique, and NS applied for a patent to protect the railroad’s rights to the invention.
Juniata rolled out the first SD60E in 2010. Over
the next decade, the shop could produce up to 240 of