BOXCARS

[Fred M Cain]

Does anybody know if North American railroads – or anybody really – plans to buy more boxcars?

 

I am an assistant purchasing agent at a small trailer factory in Indiana, and we use a lot of plywood, OSB and treated plywood.  These items are dependent on boxcar shipments from the Pacific Northwest.

 

Lumber can be easily shipped on center beam flatcars but plywood and gypsum board cannot be.

 

My supplier has informed me that it’s getting harder and harder to secure equipment to get the plywood with.  The North American boxcar fleet appears to be shrinking according to articles I’ve read in the past in TRAINS Magazine.

 

Is there any hope for a turnaround in this trend?

[CSSHEGEWISCH]

Probably not.  Much of what used to be shipped in boxcars is now in intermodal trailers or containers.

[Juniata Man]

I doubt the Class 1's are looking to expand their boxcar fleets or replace cars when they are retired. The new business model seems to be leased boxcars from GATX or pool cars through TTX. Now; some shortlines, particularly those serving paper mills, may be adding boxcars. Just as an aside, I'm beginning to see a lot of new Crab Orchard & Egyptian boxcars (reporting marks COER).

CW

[SD70Dude]

TTX is still buying new boxcars, not sure about anyone else or if they are getting enough to keep up with attrition.  

I've seen plywood and OSB shipped on centrebeams and gypsum/drywall bundles are a regular sight on them out here, but I agree that boxcars are a better way to ship those products.  

[Ulrich]

Greenbrier Industries is still building them, so i'm assuming they still have buyers. Their website shows new CN and NS boxcars, maybe those two railroads purchased some recently. The total number of boxcars in circulation has declined over the years, from about 133,000 in 2009 to around 100,000 today. 

[Backshop]

Would these be regular boxcars or "all door" ones?

[MP173]

Fred:

Just curious...you in Monroe, In or Monon, In?

Trying to narrow down the "small" trailer manufacturer in Indiana.  I work with several trailer manufacturers and the Monroe is more of a specialty manufacturer.  Just had a customer order with them last fall.

 

Ed (from Indiana)

[greyhounds]

Fred M Cain

Lumber can be easily shipped on center beam flatcars but plywood and gypsum board cannot be.  

What are the concerns with shipping plywood and gypsum board on center beams?

 

[Leo_Ames]

I imagine exposure to the elements, even if wrapped, stop the use of center beams for those.

[SD60MAC9500]

SD70Dude

TTX is still buying new boxcars, not sure about anyone else or if they are getting enough to keep up with attrition.  

I've seen plywood and OSB shipped on centrebeams and gypsum/drywall bundles are a regular sight on them out here, but I agree that boxcars are a better way to ship those products.  

 

I agree about boxcars being better equipped as well. Though I as well have witnessed gypsum and other board being hauled on centerbeams for years. Example Home Depot DC's that are rail served tend to get alot of their board on center beams. IIRC.

[SD70Dude]

greyhounds

Fred M Cain

Lumber can be easily shipped on center beam flatcars but plywood and gypsum board cannot be.  

What are the concerns with shipping plywood and gypsum board on center beams?

It's both exposure and size.  Drywall, OSB, plywood, particleboard etc are easily damaged by moisture, and the sheets are often wider than one side of a centrebeam.  I've seen plywood bundles on bulkhead flats that were the full width of the car, those might not have fit in a boxcar.

[CShaveRR]

Backshop

Would these be regular boxcars or "all door" ones?

 

The all-door box cars (Mechanical Designation LU) were pretty much all built in the early 1970s.  All of those doors were just expenses waiting to happen.  It was almost a misnomer to call them box cars, because what they really were were covered bulkhead flat cars with big, heavy doors hanging from the roof.  Wrapping the product made more sense.  And when Centerbeam flat cars came along, with higher  load limits due to the lack of need for a heavy center sill, that just about did them in.  As mentioned above, some loads couldn't fit on a centerbeam car, but bulkhead flat cars, in spite of exposing poorly-protected loads to moisture, were far easier to load and unload (and to clean out) than something that involved passing through doors.

[Murphy Siding]

SD70Dude

 

 

greyhounds

Fred M Cain

Lumber can be easily shipped on center beam flatcars but plywood and gypsum board cannot be.  

What are the concerns with shipping plywood and gypsum board on center beams?

 

 

 

It's both exposure and size.  Drywall, OSB, plywood, particleboard etc are easily damaged by moisture, and the sheets are often wider than one side of a centrebeam.  I've seen plywood bundles on bulkhead flats that were the full width of the car, those might not have fit in a boxcar.

 

Receiver of lumber and OSB here. The mills have perfected wrapping the units so they ship dry. Drywall is shrink wrapped. We got a boxcar of plywood-once.

[Convicted One]

Murphy Siding

 Receiver of lumber and OSB here. The mills have perfected wrapping the units so they ship dry. Drywall is shrink wrapped. We got a boxcar of plywood-once.

 

I've often seen plastic-wrapped bundles from USG sitting on trains in the pouring rain, and wondered how well wrapped they really were.

[beaulieu]

CShaveRR

 

 

Backshop

Would these be regular boxcars or "all door" ones?

 

 

 

 

The all-door box cars (Mechanical Designation LU) were pretty much all built in the early 1970s.  All of those doors were just expenses waiting to happen.  It was almost a misnomer to call them box cars, because what they really were were covered bulkhead flat cars with big, heavy doors hanging from the roof.  Wrapping the product made more sense.  And when Centerbeam flat cars came along, with higher  load limits due to the lack of need for a heavy center sill, that just about did them in.  As mentioned above, some loads couldn't fit on a centerbeam car, but bulkhead flat cars, in spite of exposing poorly-protected loads to moisture, were far easier to load and unload (and to clean out) than something that involved passing through doors.

 

What is funny about that is that "All-Door" Boxcars are about all you see in Western Europe now a days, as older boxcars age out. Even Meter-gauge railway

Rhätische Bahn has a small fleet of them, mainly used for bottled beverages.

 

 

 

 

 

 

 

[Fred M Cain]

CSSHEGEWISCH

Probably not.  Much of what used to be shipped in boxcars is now in intermodal trailers or containers. 

The issue here is that some products are too heavy to be shipped in a container.  OSB, plywood and wall panels are HEAVY.  Some boxcars can handle 100 tons while containers cannot handle anywhere near that amount of weight.  How much weight can you load in a container?  20 tons?  30 tons?  Maybe 40 tons?  Does anybody know for sure?

[Fred M Cain]

SD60MAC9500

I agree about boxcars being better equipped as well. Though I as well have witnessed gypsum and other board being hauled on centerbeams for years. Example Home Depot DC's that are rail served tend to get alot of their board on center beams. IIRC.

 

 

Boxcars not only keep the product dry but boxcars can be used for a variety of products whereas the kinds of products that center beam flats can carry are more limited.

[Fred M Cain]

MP173

Fred:

Just curious...you in Monroe, In or Monon, In?

Trying to narrow down the "small" trailer manufacturer in Indiana.  I work with several trailer manufacturers and the Monroe is more of a specialty manufacturer.  Just had a customer order with them last fall.

 

Ed (from Indiana)

 

 

Ed,

 

Actually no, I'm no where near Monon and I'm not even sure where Monroe is.  I'd have to Google for it.

I am in LaGrange County, about 40-45 miles east of Elkhart.

[cv_acr]

Fred M Cain

The issue here is that some products are too heavy to be shipped in a container.  OSB, plywood and wall panels are HEAVY.  Some boxcars can handle 100 tons while containers cannot handle anywhere near that amount of weight.  How much weight can you load in a container?  20 tons?  30 tons?  Maybe 40 tons?  Does anybody know for sure?

 

Containers are also relatively tiny, being 40' by 8' by 8-9' feet, when boxcars are 50' or 60' long, 10' wide and 12-13' tall inside for "high cube" cars. Even if you did "cube out" the container before overloading it weight-wise it's a bare fraction of what can be shipped by boxcar.

PLENTY of things are still shipped by boxcar, and as pointed out above, brand new boxcars are still being actively constructed in 2021.

[cv_acr]

Juniata Man

I doubt the Class 1's are looking to expand their boxcar fleets or replace cars when they are retired. The new business model seems to be leased boxcars from GATX or pool cars through TTX. Now; some shortlines, particularly those serving paper mills, may be adding boxcars. Just as an aside, I'm beginning to see a lot of new Crab Orchard & Egyptian boxcars (reporting marks COER).

CW

It's not so much shortlines that are acquiring new boxcars, it's the leasing companies using the shortline reporting marks under some agreement. Most of those AOK, ATW, COER, NOKL, LRS, etc. "shortline" cars are owned by Greenbrier, CIT, Wells Fargo, GATX, or other leasing companies and leased to the railways. Most of those COER cars mentioned are in fact probably being leased directly to various Class I railways and may never at any point in their lives EVER hit "home" rails.

[cv_acr]

Backshop

Would these be regular boxcars or "all door" ones?

New all door cars haven't been built in 40 years.

There's pretty much two most common "standard" designs for modern boxcars built in recent years:

50' inside length, Plate F excess height "high-cube" cars with single plug doors (FBOX standard)

60' inside length, Plate F excess height "high-cube" cars with double plug doors (TBOX standard)

 

And plenty of older cars from the nineties similar to the "FBOX" standard are rolling around, and also many many older late 1970s - early 1980s 50' Plate C "standard" height single sliding door (RBOX standard) cars are still out in the pool of general service boxcars, including mid-seventies Plate B cars that have been rebuilt to raise their roofs and internal volume to Plate C or F cars. These have basically less than a decade of interchange service life left in them and will gradually be replaced by the newer plate F 50' cars. (A car built in 1980 has a 50-year service life ending in 2030.)

[SD70Dude]

CN acquired 300 new boxcars through one of the leasing outfits a couple years ago, I forget which one. 

They bought 300 new centrebeams from National Steel Car at the same time. 

[greyhounds]

There seems to be more to this.

 

In Monday’s (4/19/2021) Wall Street Journal digital edition there is a video titled “How the Pandemic Made Lumber America’s Hottest Commodity.”  It’s paywalled.

 

blob:https://www.wsj.com/5933537f-1619-49e8-b059-df80a4f48bc3

 

The demand for lumber, and lumber products, has increased dramatically.  People are buying free standing homes at a very increased pace.  This includes new construction.  They are also remodeling at a very increased pace.  The demand curve for lumber, OSB, etc. has shifted significantly higher.  This has naturally driven lumber prices up.  The sawmills can only pump out so much.

 

The available rail car fleet capable of carrying lumber is what it is.  It can, of course, be increased with new purchases.  But you can’t buy a long-term asset for a short-term boom.  The purchase analysis will focus on the projected discounted cash flows.  The cash flows in the future will be discounted for three things.  Once because a dollar ten years out is worth less than a dollar today.  Second, because no one can see ten years out and know what the demand for lumber transport will be ten years from now.  A rail car asset bought to carry lumber today could well be totally worthless in ten years.  That isn’t good for an asset with a projected life of 40 years or so.  The future cash flow must be discounted to account for that very real risk. Third, there are alternative uses for the capital investment.  The potential returns foregone by buying a rail car instead of buying a peach orchard must be included.

 

IF, the discounted future cash flow projections exceed the purchase price, the new rail car can be reasonably purchased.  It doesn’t really matter if the railroad or a 3^rd party buys the new car.  The numbers must work.

 

I’ll reason some of this difficulty in finding boxcars is due to the increased demand for their use in transporting lumber.  And there is no way to justify buying more of them if that increased demand isn’t going to last.  And, right now, no one has a clue as to if that increased demand is going to last.

 

 

 

 

[SD60MAC9500]

 

greyhounds

There seems to be more to this.

 

In Monday’s (4/19/2021) Wall Street Journal digital edition there is a video titled “How the Pandemic Made Lumber America’s Hottest Commodity.”  It’s paywalled.

 

blob:https://www.wsj.com/5933537f-1619-49e8-b059-df80a4f48bc3

 

The demand for lumber, and lumber products, has increased dramatically.  People are buying free standing homes at a very increased pace.  This includes new construction.  They are also remodeling at a very increased pace.  The demand curve for lumber, OSB, etc. has shifted significantly higher.  This has naturally driven lumber prices up.  The sawmills can only pump out so much.

 

The available rail car fleet capable of carrying lumber is what it is.  It can, of course, be increased with new purchases.  But you can’t buy a long-term asset for a short-term boom.  The purchase analysis will focus on the projected discounted cash flows.  The cash flows in the future will be discounted for three things.  Once because a dollar ten years out is worth less than a dollar today.  Second, because no one can see ten years out and know what the demand for lumber transport will be ten years from now.  A rail car asset bought to carry lumber today could well be totally worthless in ten years.  That isn’t good for an asset with a projected life of 40 years or so.  The future cash flow must be discounted to account for that very real risk. Third, there are alternative uses for the capital investment.  The potential returns foregone by buying a rail car instead of buying a peach orchard must be included.

 

IF, the discounted future cash flow projections exceed the purchase price, the new rail car can be reasonably purchased.  It doesn’t really matter if the railroad or a 3^rd party buys the new car.  The numbers must work.

 

I’ll reason some of this difficulty in finding boxcars is due to the increased demand for their use in transporting lumber.  And there is no way to justify buying more of them if that increased demand isn’t going to last.  And, right now, no one has a clue as to if that increased demand is going to last.

 

 

 

 

 

Maybe it's time RR's looked into shifting most building materials into the IM network. Add Flatracks into the mix as they can be double stacked, are relatively cheap to build, don't carry the burden of boxcar investment, and can haul a multitude of items from lumber to steel products. Anything over size can use a flatcar.

 

 

 

[BaltACD]

To the biggest extent possible - Railroad are trying to minimize their investment in equipment used to haul product and give that responsibility to the user community.

You want your product hauled - you supply the rail car, container or trailer - the railroad will provide the the transportation.

[greyhounds]

SD60MAC9500

Maybe it's time RR's looked into shifting most building materials into the IM network. Add Flatracks into the mix as they can be double stacked, are relatively cheap to build, don't carry the burden of boxcar investment, and can haul a multitude of items from lumber to steel products. Anything over size can use a flatcar.  

I'll more than agree with that.  (except for the double stack)  Going IM would reduce the investment risks since the equipment could be more readily repurposed if the lumber traffic went away.  Reducing those risks will reduce the costs of acquiring new equipment.  (Again, it doesn’t matter if a railroad or a 3^rd party acquires the equipment.  The risk costs are there and must be accounted for.)

Here’s my favorite, the curtain side.  I’d use containers instead of trailers.

curtain side flatbed - Bing images

A sawmill (or paper mill) is a concentrated point of freight origin.  So, an on-site intermodal terminal is a consideration.  Bring in empty curtain side containers on spine cars.  The shipper can load the containers while they are on the spine cars.  No need for container lift on/lift off.  The curtain side containers will provide protection for the commodity against the elements.

Pick the car up with the local, as would be done with a boxcar.  Move it to an existing IM terminal and get it on a fast train toward destination.  The loads can then be distributed by truck to various consignees.  This allows them to receive in smaller quantities and reduces their inventory carrying cost. 

Unlike a center beam the containers can be loaded in both directions.  UPS, FedEx, LTL, most anything, can go in those containers. (Boxcars are also quite limited in their reload potential.)

I actually got something such as this tried.  I even got a container leasing company to lend us a flat rack free of charge for a trial. I should have been on the ground for the trial.  But I had to go on my two week’s duty with the Illinois National Guard.  So, it’s just a memory.

Now, some of you feel free to tell me why this can’t possibly work.

[jeffhergert]

BaltACD

You want your product hauled - you supply the rail car, container or trailer - the railroad will provide the the transportation.

 

Maybe.

Jeff

 

[BaltACD]

jeffhergert

 

BaltACD

You want your product hauled - you supply the rail car, container or trailer - the railroad will provide the the transportation. 

Maybe.

Jeff

Maybe on the transportation

No way Jose on the vehicle to be transported

[SD70Dude]

greyhounds

SD60MAC9500

Maybe it's time RR's looked into shifting most building materials into the IM network. Add Flatracks into the mix as they can be double stacked, are relatively cheap to build, don't carry the burden of boxcar investment, and can haul a multitude of items from lumber to steel products. Anything over size can use a flatcar.  

I'll more than agree with that.  (except for the double stack)  Going IM would reduce the investment risks since the equipment could be more readily repurposed if the lumber traffic went away.  Reducing those risks will reduce the costs of acquiring new equipment.  (Again, it doesn’t matter if a railroad or a 3^rd party acquires the equipment.  The risk costs are there and must be accounted for.)

Here’s my favorite, the curtain side.  I’d use containers instead of trailers.

curtain side flatbed - Bing images

A sawmill (or paper mill) is a concentrated point of freight origin.  So, an on-site intermodal terminal is a consideration.  Bring in empty curtain side containers on spine cars.  The shipper can load the containers while they are on the spine cars.  No need for container lift on/lift off.  The curtain side containers will provide protection for the commodity against the elements.

Pick the car up with the local, as would be done with a boxcar.  Move it to an existing IM terminal and get it on a fast train toward destination.  The loads can then be distributed by truck to various consignees.  This allows them to receive in smaller quantities and reduces their inventory carrying cost. 

Unlike a center beam the containers can be loaded in both directions.  UPS, FedEx, LTL, most anything, can go in those containers. (Boxcars are also quite limited in their reload potential.)

I actually got something such as this tried.  I even got a container leasing company to lend us a flat rack free of charge for a trial. I should have been on the ground for the trial.  But I had to go on my two week’s duty with the Illinois National Guard.  So, it’s just a memory.

Now, some of you feel free to tell me why this can’t possibly work.

This could absolutely work.  The equipment, trains and customers exist.  But I will tell you what current railroad management will probably do.

Each platform occupies one car of space, so the railroad will probably want to charge a full carload rate for each container, which of course can only carry a fraction of a boxcar's capacity.  So the customer will end up paying a much higher shipping rate per bundle of widgets than if they were using boxcars or centrebeams, and will still end up with slow service compared to a normal intermodal shipment.  

And of course this is different and will require some attention and effort, especially at the start.  PSR doesn't want new business if it you have to work for it or if it doesn't fit the predetermined operating plan.  And forget it if it might lower the operating ratio.

[jeffhergert]

There used to be a company in Jefferson IA that loaded a 5 unit spine car.  They had their own container lift vehicle.  They would off load the empty containers, load them and then reload them on the spine car.  IIRC, the load was soy products for export.

The local would spot and deliver the spine car.  At the local's home terminal the car would be sent west on the manifest that picked up and set out there.  It's been many years since this operation stopped.  I think the company closed down.

Jeff