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| Why don't railroads own Tankcars? https://www.rypn.org/forums/viewtopic.php?f=1&t=35767 |
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| Author: | HudsonL [ Sun Oct 27, 2013 6:23 pm ] |
| Post subject: | Why don't railroads own Tankcars? |
Why don't railroads own Tankcars? I mean other then a few company service cars they are all leased. All other types of cars are owned by RRs. Is there a John D. Rockefeller lurking in the woodpile? -Hudson |
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| Author: | Alexander D. Mitchell IV [ Sun Oct 27, 2013 6:56 pm ] |
| Post subject: | Re: Why don't railroads own Tankcars? |
Actually, yes, in a historical sense: http://www.bloomberg.com/news/2013-01-0 ... e-oil.html |
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| Author: | filmteknik [ Sun Oct 27, 2013 7:03 pm ] |
| Post subject: | Re: Why don't railroads own Tankcars? |
Short-term lease rates have jumped as high as $2,500 a month, more than four times the normal rate. So the normal short-term rate was $625 a month and presumably less for a long term lease? I had no idea it was so little. As to the question at hand, I believe it is because tank cars are so specialized, for liquids, gases, liquified gases, different linings, heater tubes, insulated or not, valves, drains, safety valves, etc. If the carriers can still provide the transportation product with cars supplied by others, and there's not enough return on the cars themselves, then there's no point to buying them. Perhaps a non rail lessor is in a better position to gain a return than a railroad can get with their own charges. Steve |
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| Author: | Bartman-TN [ Sun Oct 27, 2013 8:58 pm ] |
| Post subject: | Re: Why don't railroads own Tankcars? |
Today, railroads own or control less than 40 percent of the railcars in North America. Shippers are given incentives in contracts to own cars so the railroads don't have to worry as much about empty car miles. One of the biggest issues is a return on capital owning a car. A shipper who owns or leases a car will generally turn them faster and use them more often since they see the cost of the cars directly. Cars that are used seasonally (grain cars, for example) are favorites for railroads to push the ownership on to shippers, or companies that lease cars. |
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| Author: | David Johnston [ Mon Oct 28, 2013 11:08 am ] |
| Post subject: | Re: Why don't railroads own Tankcars? |
Railroads have to clean and classify empty cars for their next load. Most tank cars are not handled this way. They go back to the same shipper for another load of the same material so cleaning is not an issue. This works well for leased cars. The other reason there are so many leased cars is that there is a good tax deduction for freight car depreciation. The railroads are so capital intensive that this tax deduction may not do them any good. So cars are owned by people who need these tax deductions. Some of the car leasing company's, like Trailer Train, are owned by railroads. So some of the leased cars, reporting marks that end in X, are actually railroad owned. |
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| Author: | NKP1155 [ Mon Oct 28, 2013 4:38 pm ] |
| Post subject: | Re: Why don't railroads own Tankcars? |
Yep, there is a John D Rockefeller in the works. He had a monopoly on oil and demanded big kickbacks on freight rates. These were even paid to him on carloads shipped by his competitors. When John Law got involved, the kick-backs were to stop & the RR's sold their tank fleets to oil producers avoid the temptation. JD could route his cars to the RR that gave him the lowest rate, but he no longer could skim a piece of the transportation costs of his few rivals. |
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