These are my recent photos of the CN / NOKL 3-Bay Covered Hoppers.
Andrew Falconer
Watch my videos on-line at https://www.youtube.com/user/AndrewNeilFalconer
I'm pretty familiar with car hire arrangements, and I doubt very much that this arrangement is intended as a device to permit CN to avoid paying car hire for the cars while on CN. All that the parties would have to do to accomplish this is to make a bilateral car hire agreement for "zero" car hire while on CN. Why make something simple into something complicated? It has some other purpose.
Beyond this point, the use by car leasing companies of short line reporting marks for their cars is a long-standing abuse in the rail industry (sometimes called "rent-a-mark" or "flags of convenience"). Leasing companies engage in this practice to get the benefit of the railroad car hire "deprescription" rules, which have fallback (default) rates and other features which give the leasing company the opportunity to get higher rates than they would be able to obtain in unregulated, market transactions.
With respect to the point about reporting marks, CSSHEGEWISCH is correct, it is the reporting mark which matters for purposes of car accounting. However, the owner of the mark (in this case, NOKL) can designate an agent for car hire receivables. NOKL has undoubtedly designated First Union as its agent for these cars as part of the deal for the use of NOKL's reporting marks.
CSSHEGEWISCH Mismatched hoods on coil cars are less common than they used to be. I've noticed a lot of hoods are stenciled on the ends for the series of cars to which they belong.
Mismatched hoods on coil cars are less common than they used to be. I've noticed a lot of hoods are stenciled on the ends for the series of cars to which they belong.
Ive noticed it too. Out in the country, its all matched hoods now. But inside the plants, all the captive cars have whatever hood was handy.
CSSHEGEWISCH Andrew Falconer: What were former BNSF Coil Cars are now NOKL Coil Cars, with the original BNSF Coil Car graphics sill on the hood or cover. Andrew As far as railroad accounting is concerned, the reporting mark is what matters. The other graphics are just advertising.
Andrew Falconer: What were former BNSF Coil Cars are now NOKL Coil Cars, with the original BNSF Coil Car graphics sill on the hood or cover. Andrew
What were former BNSF Coil Cars are now NOKL Coil Cars, with the original BNSF Coil Car graphics sill on the hood or cover.
Andrew
As far as railroad accounting is concerned, the reporting mark is what matters. The other graphics are just advertising.
The hood on the coil car doesn't mean a thing. If the cars were of the same size, and built by the same manufacturer, you'll see hoods being swapped almost from the get-go.
(Cacole, I doubt that you saw any NOKL tank cars!)
Carl
Railroader Emeritus (practiced railroading for 46 years--and in 2010 I finally got it right!)
CAACSCOCOM--I don't want to behave improperly, so I just won't behave at all. (SM)
Andrew Falconer What were former BNSF Coil Cars are now NOKL Coil Cars, with the original BNSF Coil Car graphics sill on the hood or cover. Andrew
Let me rephrase that "Is this a way for CN to keep payments down on the cars?".
I saw several NOKL cars mixed into an eastbound Union Pacific train on the Sunset Route in Benson, Arizona on Saturday, July 30th. No covered hoppers, but boxcars, tank cars, and gons.
Andrew,
Assuming that CN in fact leases the cars from a nonrailroad owner, then CN is committed to a monthly lease payment. If cars are on CN, then CN is making the lease payment so your statement that this arrangement is "to avoid paying for car usage on the CN" is false.
When cars are not on CN they are by definition on some other railroad. When they are on a "foreign" line car hire is paid to NOKL, owner of the reporting mark. By private contract I am 99.999% certain that NOKL is paid a flat monthly fee by the owner and remits all car hire earnings to the owner. The owner probably remits most, if not all, of the car hire earnings to CN. Under this scenario CN is making lease payments on a car it does not have, but is receiving car hire earnings that in theory make it whole vs. the lease costs.
Generally the Class I carriers would rather have the car than the car hire earnings since the car should be generating much more revenue on its home road than car hire earnings would be. Home road cars are not free, ever. They represent the railroad's largest class of capital asset and they are all being paid for somehow, usually installment purchase or a lease.
Even if they are "paid for" on a cash basis, they still represent money tied up in their scrap value. The forgone return on scrap value is what economists call "opportunity cost". The concept being that by keeping the car the owner is forgoing whatever he could earn on the value of the car.
Mac
This arrangement is to actually to avoid paying for car usage on the CN.
NOKL's yard at Woodward is tiny, it and the shops NOKL built there are all that's left of the BM&E(MKT) that got all the way to Keyes,OK where it joined the CV District of Santa Fe (Now shortline Cimmaron Valley RR) in the Oklahoma Panhandle.
"Since they are rarely on the NOKL they should be getting paid well if the big railroads are keeping the accounting right."
Not correct!
Refer to the previous message; there it states that these cars are leased to CN. While on CN they would be considered system cars so no per diem. When off-line per diem may go to either CN or NOKL (probably CN). CN is making lease payments to First Union Rail, the actual car owner.
The car leasing companies pay shortlines such as NOKL to register cars under their intials instead of the leasing company's initials (FURX and others in this case). This is a dodge to take advantage of loopholes in AAR's per diem rules.
The same thing went on in the 1970s with the Incentive Per Diem boxcars (the cars lettered in colorful schemes for roads such as South Branch Valley).
Kurt Hayek
Thanks.
Since they are rarely on the NOKL they should be getting paid well if the big railroads are keeping the accounting right.
The cars are owned by First Union Rail, a major equipment leasing company.
They are lettered for NOKL, a reporting mark actually owned by First Union Rail, so that they may collect per diem for their owners or the lessees, depending on the particular agreement.
They are leased to CN, so that is the home road, where they are expected to be loaded.
It's possible that the home road is instead the Northwestern Oklahoma, in which case they are almost always collecting per diem (all of the NOKL-lettered cars couldn't possibly fit on their trackage) hand-over-fist for their owners.
The 5300 Cubic Foot Capacity CN/NOKL 3-Bay Covered Hoppers built by National Steel Car are a different arrangement for a large railroad to share operation of a freight car with a shortline.
What is the true home road for these freight cars?
Are they maintained by one of the railroads or just the shippers?
Thanks for the replies.
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