About 7 miles from my house, the is a company, Midwest Railcar Repair, at Corson, S.D… This place is full to the brim, with banged up railcars awaiting repair. Every day I hear ads on the radio for this company, trying to find more workers, because they can’t keep up. Yet, between there and here, is a rail line with 50 or so railcars in storage. I’ve also read on this forum, of lots of cars in storage. How can there be a backlog of cars to repair, while there is an oversupply of cars in storage? Wouldn’t the class 1’s put off car repair expense at a time like this? The business is on a BNSF line, and there are a lot of BNSF cars in there, awaiting repair.
Murphy,
I will take a stab at it…
Most cars fleets are owned by leasing companies, companies like GATX or Union Tank Car…the railroads don’t decide to store cars, they simply supply/rent the space to do so, it is the car owner or lessor who decides to store the cars.
And, because most cars are leased long term, and in large groups, there is no place to lease or rent 1 or 2 cars to replace damaged cars.
No one keeps spares or loaners.
Same for railroad owned cars, they don’t keep “spares”, and even if they did…say the car was damaged in Ohio…and the replacement car was stored in Texas.
Which would be cheaper and faster…repair the car close to or where it is at, or expedite a single car from Texas to Ohio?
That and the lease is for those specific cars, you can’t “transfer” the lease from one car to another.
When you say long term lease, for most car groups you are talking about several years, not one or two months, or one or two years.
Think about this while you’re at it.
If a railroad damages a car to the point it is out of service for any period of time, the railroad that damaged the car pays the owner/ lessor the daily rate on the car, so it is financially advantageous to the railroad to repair the car and return it to service as fast as they can.
The FRA and the AAR have a set of standard repair costs to bill.
Lets say Murphy Railroad forwarded a car to the PTRA with a damaged end platform, and on inspecting the inbound train, the PTRA carmen found the damaged car.
We would place the car in damaged status, spot it in the rip track for repair, our car department would replace the end platform and charge or bill you, Murphy Railroad, the set AAR repair cost…
Now, the set billing cost and the actual repair cost differ a lot.
Lets say the PTRA buys end platforms in groups of 100, at $75.00 each, but the AAR manual say you bill the repla
Great explanation (at least in my opinion) Ed!
How are things do in Houston? Getting back to normal?
Mike
FEMA, for all intents, left town Sunday…about the only lingering problem is the traffic lights are still screwed up…and it will be a long, long time before Galveston is really livable.
It could be Program work suchas upgrading the brake systems or making the cars shorter or longer . There seems to be alot of this going on .
Thanks for the input Ed. The railcar repair company is pretty good sized. Judging from the line up of cars in their yard, they must do quite a bit of heavy car repairs.