PSR, which most Class I systems and certain short lines are using to maximize productivity of assets, is among the reasons utilization of GATX boxcars dropped in the second quarter of 2019 says Tom Ellman, GATX executive vice president and CFO.
“We continue to believe that PSR will have the biggest effect on high-mileage cars — coal, intermodal, boxcars — and much lower on the lower-mileage tank and specialty hoppers that make up the bulk of the GATX fleet,” Ellman says.
“Until recently, the impacts of PSR on the boxcar fleet have been offset by fleet attrition,” according to Ellman. “But during the second quarter those PSR impacts, combined with weather, and flattening in the growth of packaging materials, caused boxcar utilization to decline from 95 to 94%.”
He says it’s possible boxcar utilization could drop by another 1 or 2 percent by year’s end.
The GATX second quarter report lists 16,000 boxcars in its total North American railcar fleet of 119,500. Unlike the average 20-year age of the GATX fleet, boxcars average 40 years. As a result, Ellman says the long-term impacts of PSR will be muted by boxcars leaving the roster.
Non-boxcar GATX utilization is 99 percent, boosted by a fleet makeup of 50 percent tank cars, for which there is a demand backlog.
Destroy customer service and drive away customers lowers carload stats thereby reducing the need for cars. Stupid logic that is short sighted.
This is just the thing that PSR is supposed to accomplish. Fewer assets mean less cost and doing more with less is always good. PSR is working.
The boxcar is boutique service. Don’t expect any new orders soon. Once the current fleet wears out. Expect purchases to be minimal, too cover cars going to the shredder.
In pre-PSR days, railroads would find customers to fill those cars and get them back in service thereby earning more revenue. Not so today. Let them sit & rust as long as the quarterly stock reports are good.