Scrap, or Store During Current Downturn

[Victrola1]

A videographer has edited old locomotives apparently on their last legs years ago. 

"Great Lashups on the BNSF Galesburg, IL 2007 to 10"

https://www.youtube.com/watch?v=t3ag35kMw-I

Business currently is down. How many to store? How many to scrap? What crtieria to determine? 

 

[NorthWest]

With the introduction of PSR in the last couple of years, most of the older power has already been stored or sold.

BNSF has recently been clearing out long-stored power, but otherwise I haven't heard much in the last couple of months.

[caldreamer]

Yes, BUT what happens when business picks up again the railroads find their butts in in sling because they are power hungry???

[kgbw49]

I would suspect they will hang on to power that can be economically converted to AC power or older AC power that can be refurbished.

Many of these upgraded units seem to be proving their worth.

For I nstance SD70s that can be converted to SD70ACC units or C44-9 units that can be upgraded to AC44CWM (or other letter after AC44) would be valuable to hang on to.

Also, some early AC Models that can be upgraded such SD9043MAC to SD70ACU or SD70MAC to SD70MACE or refurbished AC4400CW could provide economical power in the future at a point when traffic turns up.

[zugmann]

caldreamer

Yes, BUT what happens when business picks up again the railroads find their butts in in sling because they are power hungry???

Then they'll lease back for a large sum the power they sold for a tiny sum.  

 

And they'll pat themsleves on the back for doing such a great job. 

[PJS1]

NorthWest

With the introduction of PSR in the last couple of years, most of the older power has already been stored or sold. 

According to several articles in the popular press last week, Norfolk Southern has sold approximately 300 locomotives and plans to sell another 400.

Most large companies have sophisticated financial models that can tell them, within reason, whether holding on to equipment or selling it and/or subsequently leasing newer units is likely to produce the best financial results for the company. 

[zugmann]

PJS1

Most large companies have sophisticated financial models that can tell them, within reason, whether holding on to equipment or selling it and/or subsequently leasing newer units is likely to produce the best financial results for the company. 

I think you overestimate how the railroads operate. 

[PJS1]

zugmann

 PJS1 Most large companies have sophisticated financial models that can tell them, within reason, whether holding on to equipment or selling it and/or subsequently leasing newer units is likely to produce the best financial results for the company.  

I think you overestimate how the railroads operate. 

Without access to the company's books, I don't know how much they rely on financial models. 

When I was working I met several finance people from UP and BNSF at various accounting and finance conferences.  They were as sharp as anyone in the room.  

[D.Carleton]

kgbw49

For instance SD70s that can be converted to SD70ACC units or C44-9 units that can be upgraded to AC44CWM (or other letter after AC44) would be valuable to hang on to.

NS has just completed their disposal of what remaining non-AC traction 70 series SDs remaining on their roster. Whether this is an editorial of the results of the SD70ACC program or a dim view of the prospects of growing freight volumes remains to be seen. On the other hand, UP and BNSF combined appear to have maybe 500+ DASH 9-44CWs in storage. In all likelihood most will never turn a wheel again for their owners. In theory NS could pick up 100 or more as AC44C6CM rebuild fodder if traffic volumes warrant such in the future.

[Leo_Ames]

With the recent announcement that Norfolk Southern intends to sell 400 more locomotives, I suspect NS themselves will soon have some Dash 9's to sell. 

In fact even if that total to be retired includes some yet to be sold power that we already knew about (i.e., the SD70M-2's), I feel that it's still looking quite possible that we'll see NS themselves let some Dash 9's go.

NS has approximately 242 C44-9W's parked at present and of those, 214 are in storage due to being not needed, 3 more are sitting pending rebuild for wreck damage, 4 are en-route to Wabtec for AC44C6M rebuilding, and 22 more are stored for their AC44C6M rebuilding (If my count at NSDash9.com was accurate).

Not hard to imagine 200 Dash 9's being strickened with how things are going. And if all those stored SD70ACU's rejoin the active fleet, maybe even 250 Dash 9's as things now stand. 

Edit: A few hours after this post, the Trains Newswire stated that "NS will retain 402 stored locomotives that will be available as a surge fleet".

So my suspicion that we may have been on the verge of seeing the Dash 9 fleet trimmed down probably was off the mark according to the current gameplan.