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Tim, In a word, control, and to a lesser extent assured supply. If you own (or lease) them you control them they come back to you when empty. This is more important in some situations than others. If you are shipping in boxcars you will probably not want to own them because the railroads have plenty and at 20 cars per day you will be an important customer and the originating line will flow 20 cars per day to you and probably have a day's supply very close to you. If you are shipping in tank cars, you will own or lease cars because the railroads do not supply tank cars. This goes all the way back to the Pennsylvania oil fields of the 1850's and 60's when the PRR did not want to supply tank cars. J. D. Rockerfeller did, and that is the foundation of his fortune. The PRR made a wise decision because tank cars come in an incredible variety and tend to be built for one or a few commodities. As a practical matter, they are not as versitile as box cars and you can not easily change from one commodity to another. If you are shipping hot sauce you would not be too keen on the PTRA using your car to haul styrene to Chicago. Hopper cars are an intermediate case. Grain cars are pretty much all alike and you do not see a lot of private grain cars and most of them are leased to BN & UP to simplify fleet management. Plastics and chemical cars are like tank cars, one commodity and often private. Plastics cars are often used as temporary storage bins. Railroads discourage this with their own cars by charging demurrage at a rate of 2-4 times actual capital cost of the car. Last case is TTX. This started out kind of like tank cars. Piggyback was a new deal and railroads, again PRR, were skeptical about making a long term investment in a business that may or may not go away. The major railroads got together and created a captive leasing company that became TTX. Railroads funded TTX and guaranteed the debt, but paid for cars as they were used. This kept the cars, and the associated debt off railroad's ballance sheet. TTX contines because they can manage a national pool of cars better than the individual railroads. What that means is that with TTX the fleet is smaller, and more flexible as to depolyment, than it would be if each railroad undertook to provide cars to protect its own loadings. RBOX and GONX are same idea as applied to box cars and gondolas, by TTX. This has evidently not been as advantageous as with flats because TTX has not bought boxes or gons for several years. No, you do not need to own track to own cars, but if business turns down and you have to store they the railroad will charge you storage charges. Track is not free! Mac McCulloch
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