In The 7 Habits of Highly Effective People Stephen Covey listed #2 as “Begin With The End In Mind.” So, I am taking a risk and giving you the end of my article first.
Here it is:
Shippers have gotten too comfortable with an oversupplied railcar market. Better to have and not need than to need and not have. (Emphasis mine.)
Since school is starting up I thought it would be good to have that first quiz of the year. Let’s see how you do.
1. How many railcars are in service in North America today?
2. What percentage of the total fleet today is owned by rail carriers?
3. How many new railcars (of all types) are delivered annually?
4. Why should I care about any of this?
Now let’s answer the first 3 so we can get to the all-important #4.
- Today there are around 1.6 million freight cars in service. That is almost 10% (150,000) more than 8 years ago.
- Less than 20% of all railcars are owned by railroads. Shippers own almost as many as railroads. The big owners are leasing companies who own more than half of all railcars and own 80% of all tank cars.
- Projections are that 50,000 railcars will be delivered in 2018 and up to 60,000 by 2022. By comparison in 2010 deliveries fell to well under 17,000 and were less than 6,000 in 1983.
And finally (drum roll) why should you care? Consider this- 4 out of 5 railcars are privately owned. If you rely on the railroad to supply all your railcars you are tapping into only 20% of the total pool available. There are a lot of railcars being built but most of those will also be owned by private companies, not carriers. Which means car supply from the carriers is likely to get no better and will get worse.
Do you depend on the railroad to supply your cars to load? Do you always get enough supply? Maybe private railcars are no priority. But for everyone else, keep in mind where I began.
To paraphrase, it is better for you to have enough railcars and not always need them than to always need them but never be able to get them.
Take more control of your railcar supply. Click here for extra free no-obligation information.
Sources: bit.ly/GATX_NEARS, bit.ly/NSCL_NEARS, http://bit.ly/2OEfTtV