Exploring Public Sector Roles in Assuring Adequate Freight Car Supply among Short-Line Railroads
Patterns of railroad freight car ownership and use vary
based on business conditions, commodity, car type, season, and the
characteristics of available railroad infrastructure over which the cars are operated.
Generally, however, freight cars are supplied by (1) large common carrier
railroads (or organizations they create), (2) rail shippers, or (3) third-party
interests that lease cars to both carriers and shippers. Presently, with very few exceptions, the
availability and disposition of freight cars is managed through complex and very
fluid private-sector market interactions.
In most settings, this private management of railroad car
supply is effective. However, as the railroad commerce continues to evolve,
structural industry changes have created a setting where, at least some,
smaller common carrier railroads (short-lines) are finding it increasingly
difficult to secure the rail cars they need. The larger, Class I railroads
continue to adopt longer freight cars and cars that are capable of carrying
However, many short-lines operate over infrastructure that cannot yet accommodate
longer, heavier equipment.
Two additional factors exacerbate the problems this causes. First, because
Class I railroads are no longer purchasing smaller equipment, the natural cycle
of equipment retirements is shrinking the fleets of short-line-appropriate rail
cars. At the same time, short-lines continue to grow in importance as a means
of rail network access, particularly in smaller, rural communities.
Therefore, the demand for smaller freight cars is increasing.
A majority of state DOTs administer programs that provide
varying degrees of support to short-line railroads operating within their
jurisdictions. However, most of these programs limit the extent to which state
funds can be used to purchase or lease equipment and many programs prohibit
expending state funds for freight cars altogether. Instead, state-level
programs are more often oriented toward remedying the bridge and track
conditions that restrict the use of heavier equipment. Nonetheless, because the
mismatch between the availability of and demands for smaller railroad equipment
causes an immediate hardship for short-lines and their customers and because
remedial infrastructure improvements are expensive, many state rail programs
are now reconsidering the use of state program funds for car supply as a
short-run substitute for longer-run infrastructure improvements.
(file:///C:/Users/Mark/Dropbox/ALL%20RAIL%20WORK/RR%202019/TRB19/NEEDS_STATEMENTS/TRB_RAILCAR_RNS_2018(2).docx#_ftnref1) For example, TTX is a rail industry-created firm
(owned by nine North American carriers) that provide pooled access to specific
types of rail cars to the owning railroads. By contrast, third party firms like
GATX or Greenbrier acquire (or manufacture) railroad cars and lease them to
both railroads and railroad customers.
(file:///C:/Users/Mark/Dropbox/ALL%20RAIL%20WORK/RR%202019/TRB19/NEEDS_STATEMENTS/TRB_RAILCAR_RNS_2018(2).docx#_ftnref2) Freight railroads are divided into three classes based
on annual operating revenues. For 2016, this revenue threshold was at least
$447.6 million for class I railroads, at least $35.8 million for class II
railroads, and less than $35.8 million for class III railroads.
(file:///C:/Users/Mark/Dropbox/ALL%20RAIL%20WORK/RR%202019/TRB19/NEEDS_STATEMENTS/TRB_RAILCAR_RNS_2018(2).docx#_ftnref3) Generally, North America’s Class I railroads can
accommodate cars with a gross (loaded) weight of 286,000 pounds and car lengths
up to 90 feet.
(file:///C:/Users/Mark/Dropbox/ALL%20RAIL%20WORK/RR%202019/TRB19/NEEDS_STATEMENTS/TRB_RAILCAR_RNS_2018(2).docx#_ftnref4) At the time of rail industry regulatory reform in the
early 1980s, there were approximately 200 Class II and Class III carriers;
today, there are roughly 600. Short-lines account for approximately 20 percent
of car loadings, 15 percent of railroad ton-miles, and 10 percent of industry
The proposed research has four objectives. These include:
Update and catalogue (geographically and by type
of carrier), the extent to which weight and size restrictions mandate the use
of freight cars that have less capacity than the equipment that is consistent
with North American, Class I standards;
Analyze the age and composition of freight car
fleets in order to predict the future availability of equipment of varying
sizes and configurations;
Measure the extent to which freight car
availability may, at some point, limit the availability of freight rail services,
particularly in rural communities; and
Explore the nature and potential benefits of
public-sector policies aimed at (1) assisting affected rail carriers in
securing an adequate supply of appropriately sized freight cars or (2)
eliminating the size and weight restrictions that make the use of smaller
The primary benefit is to state and federal planners and
policy-makers who are charged with assuring adequate freight rail service
throughout the United States. Specifically, the proposed research will:
Quantify the extent to which freight car supply
issues pose a threat to the availability of freight rail services; and
Provide planners and policy-makers with a
detailed and cogent evaluation of the various potential public-policy responses
available to address any identified car supply issues.
A survey of both academic and
popular literature reveals a rich set of materials describing the emergence of
short-lines in the wake of regulatory reform, the issues posed by need to
accommodate cars with a gross weight of 286,000 pounds or more, and
state-funded rail programs.
However, this same literature reveals two shortfalls in the existing body of
knowledge. First, the existing work is generally geocentric and highly
fragmented, so that a synthesis and reconciliation of existing work is needed.
Second, and more importantly within the current context, the existing
literature is almost exclusively focused on long-run infrastructure improvements
and largely fails to treat public-sector intervention in the form of improved
car supply as a short-run, stop-gap remedy.
In practice, as noted, various states are considering
liberalized policies regarding the use of state funds to support rail car
supply. The most aggressive of these has been the state of Washington which
since 1994, has owned a fleet of grain cars that are made available to
Washington state shippers through a program known as . Not
only, does Washington’s DOT actively intervene to help assure car supply, there
is an indication that its forward-looking view supports providing cars of
various sizes, depending on setting. Specifically, its most recent strategic
Recently, some of the cars have been used to
move wheat short distances within the state in “scoot” trains between smaller
elevators to larger elevators and/or shuttle facilities. At the
shuttle facilities, the grain is transloaded into larger jumbo hoppers for
delivery by the mainline rail companies to export terminals in western
Washington and Oregon. (Emphasis Added)
(file:///C:/Users/Mark/Dropbox/ALL%20RAIL%20WORK/RR%202019/TRB19/NEEDS_STATEMENTS/TRB_RAILCAR_RNS_2018(2).docx#_ftnref1) What follows is an abbreviated list of useful
resources: Michael W. Babcock and James Sanderson, “Should shortline railroads
upgrade their systems to handle heavy axle load cars?” 42 (2006) 149–166; Thomas M. Corsi, Ken Casavant, and Tim
A. Graciano, “A Preliminary Investigation of Private Railcars in North America,”
, Volume 51 No. 1, Spring
2012; C. Phillip Baumel and Craig O’Riley, “Preserving Railroad Infrastructure:
The Case of Iowa Branch Rail Lines,” , Volume 56 No. 3, Fall 2017; Eric J. Fitzsimmons, Stacey E.
Tucker-Kuleszaa, and Lisa M. Shofstallb, “Case study of Class III (short line)
system inventory to determine 286,000-LB. (129,844 KG) railcar operational
status in Kansas, USA,” Journal of Rail Transport Planning and Management, 8
(2018), pp 158-166;
Based on the Research Objectives outlined above, the
proposed research entails the execution of six specific tasks. These include:
Identify Weight/Size issues, in addition to the
standard 286,000-pound gross car weights, that result in the need, for many Class
II and Class III railroads to use relatively small freight cars;
Use state rail plans, information disseminated
by the RRs, and other information sources to identify where and to what extent car
size and weight restrictions mandate the use of substandard sized equipment. If
possible, to some extent, quantify affected traffic.
Synthesize existing academic and state-sponsored
research regarding the relationship between track and bridge improvements and
Carefully analyze the characteristics of
existing and projected rail car fleets to determine whether those fleets will
be sufficient to sustain rail network access in cases where carriers are unable
to accommodate heavier or long rail cars. Predict when, where, and for what
commodities, car supply may threaten rail access.
Evaluate the active / potential public-sector
policies for improving car supply of target car types and evaluate the costs
and likely effectiveness of these policies in comparison to alternative
programs aimed at eliminating weight and size restrictions on short-line
Develop a detailed plan to discriminate research
findings to state DOTs and other stakeholders.
As indicated above, the selected
research team’s final task would a carefully conceived plan for discriminating
research findings. At very least, this would involve close interactions with
state DOTs, through the American Association of State Highway and
Transportation Officials (AASHTO).
The proposed research will allow state DOTs to develop and execute more thoughtful and productive short-line railroad programs.
|Sponsoring Committee:||AR040, Local and Regional Rail Freight Transport
|Research Period:||12 - 24 months|
|RNS Developer:||Mark Burton|
|Source Info:||Committee members, existing research, and publicly available data.|
|Index Terms:||Private enterprise, Governments, Short line railroads, Car supply (Railroads), Freight cars, |
Vehicles and Equipment