What Does Decreasing Boxcar Fleet Mean for U.S. Capacity?

Box cars are an aging technology that is still relied upon by many shippers. Steve Raetz, from the Transportfolio blog, described in depth the situation in his recent post. Here’s a portion of the article:

The story of the disappearing boxcars seems to be one that is best understood through the data and in the eyes of individual shippers and the industries that leverage these assets.
The current boxcar fleet consists of 115,000 cars; 65,276 boxcars will retire over the next 15 years. But new technologies, such as newer boxcars with higher freight capacities, are slowly replacing the older versions. At the same time, this isn’t an absolute solution; older infrastructure can’t handle the larger freight cars, especially in the northeast.

  • Railroads own more than 75% of all boxcars; the average age of these boxcars is close to 30 years. Privately-owned boxcars account for 22% of the market, and boxes have an average age of 19 years. It appears that railroad companies do not foresee a need to increase their ownership or increase their orders for new boxcars in the near future. In fact, they provide incentives and reduced rates to those who use private freight cars instead of using the railroad’s fleet.
  • Fewer industries today—especially paper, beer, plywood, and metals—still rely on boxcar use. Products that have traditionally shipped by boxcars are now being moved on newer types of freight cars that are more efficient. Lumber is now shipped on center beam flat cars, which can haul more product per car than boxcar, and are easier to load and unload. Auto manufacturers have moved manufacturing facilities closer to suppliers, making trucks a more economical transportation choice.
  • Boxcar fleets are shipping a decreasing number of shipments. In the last 10 years, rail ton-mile shipments have decreased 42% for lumber/wood, 42% for motor vehicles and parts, and 13.2% in pulp and paper. In addition, railroads find boxcars less attractive than unit trains. Boxcars cost $135,000 each, and they have higher dwell times and lower turns than much more profitable unit trains—large trains with similar equipment that go point to point without stopping.

See more here

The Way Forward: US Commercial Ship Building: A Strategic National Asset

China, Brazil and now India have declared that their commercial shipyards are “Strategic National assets”

“US-built coastal ships are the trucks of the US Marine Highway”

The United States needs a fleet of modern coastal container and trailer ships and modern commercial shipyards that are up to the task. This new fleet is essential to the nation’s economic security and viability. It will be one element of a strategy to address the nation’s freight capacity requirements at a time of crisis in landside infrastructure funding. New ships will replace an aging, inefficient Jones Act container fleet at a time when strict, new environmental standards are enforced for the North American Emissions Control Area. Construction of these vessels and their deployment along America’s coastal corridors will create tens of thousands of new direct, indirect and induced jobs on the water, in the ports, and in our yards. We expect that a new fleet of American container feeder ships, servicing a vibrant US coastal marine highway, will join rail in offering competitive intermodal transportation services for domestic and import/export goods.

Download Full White Paper

The Missing Transportation Mode

Sometimes the Simplest Solutions are the Hardest to See

Today the United States has two well-recognized surface transportation modes—rail and road— and a third, which largely is forgotten. Missing is the marine mode.

Less than .003% of the U.S. Department of Transportation budget is proposed to be spent on the marine mode. A tiny fraction of that amount was allocated in FY 2010-2011 to starting up and supporting the American Marine Highway program and zero funding is budgeted for the program in FY 2012. Remarkably, America’s most underutilized and efficient transportation system asset is barely visible on the Federal funding screen.

Download Full White Paper

Two Ways To Revitalize US Shipbuilding

Government incentives have jump-started new technologies, and fostered the revitalization and retooling of entire U.S. industries. .Recent examples include substantial Federal rebates for electric cars, credits for LEED certified building systems, Renewable Energy Credits (REC) for Green Energy generation, loan guarantees for solar and wind turbines farms, the development of greener engines, and, most dramatically, Federal support for the auto industry and the Wall Street bank bail-outs.

Billions of dollars of new investment capital has been attracted by government supported start-ups and recapitalized industries whose products and services benefit society as a whole while sustaining and creating thousands of new jobs. Although Federal and State treasuries might defer taxes at the start of a program as an inducement to invest new capital into a venture, the pay-back from wage earners paying taxes often is multiples of upfront tax deferrals.

We believe that a vibrant U.S. shipbuilding sector is mission critical to America’s transportation and manufacturing future. It certainly is essential to the future of U.S.-flag shipping. For these reasons we strongly support efforts to revitalize the industry.

Download Full White Paper

Ship Building and National Security

National Security is Critical but ensuring our Economic Survival is Essential

The United States needs a modern commercial shipbuilding sector to secure the nation’s national and economic security. We must be prepared to face a catastrophic event or an overseas conflict that requires U.S. built commercial vessels to transport provisions, equipment, ammunition and vehicles; as well as trained and qualified United States Merchant Mariners to operate the vessels—all in name of national and economic security. However we may be close to not being able to meet these needs.

It is a recognized fact that a vibrant United States shipbuilding industry is a key component of the national security plan for the United States. Without modern shipyard facilities and ship building capacity we will not be able to build and refit U.S. Naval and Coast Guard ships that protect our coasts and offer our armed forces the ability to project military power in the far corners of the world. But as a commercial island trading nation, a strong Navy is only part of the shipbuilding story.

Download Full White Paper

Modal Shifts to Relieve Global Gridlock

In the forward to a recent National Governors Association report, Pennsylvania Governor Ed Rendell offered the following assessment of our nation’s infrastructure: “Despite its importance, America’s infrastructure has not kept pace with our country’s growing and shifting demands and the changing world around us. A growing pattern of underinvestment and uncoordinated planning has led to a range of concerns that are felt across the country; including wide spread congestion, unsafe bridges … More broadly, we have created a system that leaves us dependent on imported oil, vulnerable to rising energy prices, and ill-equipped to address the challenges of climate change”.1

The executive summary goes on to add that “America’s current infrastructure investments are also not keeping pace with our global competitors.” It goes on to cite that China invests 9 to 12 percent of GDP, India and the European Union invests 5 percent and Japan consistently invests 10 percent of GDP. The U.S. spends only about 2.6 percent of its GDP on infrastructure. The American Society of Civil Engineers in 2009 awarded our own country’s infrastructure a D rating and estimated that we need at least $2.2 trillion over five years to bring our infrastructure up to a passable B level.

Lack of infrastructure spending exacts a heavy toll with over $200.0 billion in annual net economic losses due to congestion including 2.9 billion gallons of wasted fuel and 4.2 billion man hours of time. The situation is so dire that 94 percent of the American public has expressed a growing concern about the condition of the nation’s infrastructure. 

Download Full White Paper