The Value of Private Railcars
As a customer-centric, niche railcar leasing company, we assist our customers with varying degrees of support as they navigate shipping and receiving products via rail. We generally find that our customers are just getting their feet wet in rail, and as such, they typically have little, no, or have had horrifically bad experiences shipping by rail. This is where we create the most value for and with our customers. Knowing the plethora of benefits that shipping and receiving products by rail generate, when accessing our customers transportation needs it generally becomes evident that our customers will benefit from shipping by rail. From the overall decrease in freight expense to the benefits economies of scale provide, rail shippers quickly see that the benefits far exceed the costs. So, in the best interest of our customers, our duty then becomes one of educating our customers sufficiently so that they are comfortable with shipping or receiving products by rail, working with the railroad, and controlling as much of the shipping-by-rail process as possible.
What’s on the Tracks? Railroad System Railcars
One of our customers’ top questions is, “Can I rely on the railroad to supply me with the railcars I need to align with my specific business needs?” This is an excellent question and one that requires a quick history lesson. Rail shippers generally believe that using railroad-supplied railcars (also referred to as railroad system railcars) will be sufficient for their short-term, long-term, and ever-changing rail shipping needs. However, railroads own and/or control only 20% of the 1.6 million railcars in the North American railcar fleet. That means 80% of the remaining railcars are owned by some other party, not the railroad. That massive count of railcars won’t be available to our customers if they rely solely on the railroad. Furthermore, most railroad-owned and controlled railcars work across multiple commodities. That means that the railcar needed may not only be in service with our customer’s competitor but could also be used in some other service that could create issues for our customer’s next load (think cleanliness and cross-contamination).
The Importance of Railcar Visibility
We highly recommend shippers read the recently published case study, The Importance of Railcar Visibility, published by RailState. This compelling case study examines the use of data to optimize efficiency and rings true to the challenges of using railroad-supplied railcars. As many shippers learn, the railroad supplies railcars on the railroad’s schedule, not necessarily on the shippers’ schedule. Adding private railcars to your pool of railroad railcars gives the shipper a degree of flexibility to fill in the gaps out of your control. You can see those gaps by using RailState’s application. The railroad doesn’t supply the capacity of empty railcars that shippers need, so often, shippers are forced to ship via truck or intermodal — more costly options. Visit RailState.com for more information.
While efforts continue to be made to increase the visibility of railcars in North America, buying or leasing private railcars is the best way to control your logistics plan and improve our shipping-by-rail experience. The alternative to relying on the railroad to supply railroad system railcars is to lease or purchase privately owned railcars. Building a leased or owned private railcar flee, is your first step to better controlling railcar assets when you need them. In the coming months we’ll be featuring a series of blogs focused on how to identify the railcars you need (type and quantity), how to assess railcars, and much more.
Railcar supply is critically low. If you have idle railcars, railcars in storage, railcars near end of life, or railcars that aren’t maximizing their useability, we are eager to put these railcars to work. Partner with Tealinc to sell, lease, buy or trade railcars. Contact us to learn more at email@example.com or by phone at (708) 854-6307.
Furthermore, if you already own railcars and need to keep them in service but need cash to invest in and grow your business in 2023, visit with Tealinc about a sale-leaseback structure to keep your railcars in your overall operations plan while also allowing you to generate cash to fuel your business expanse. Learn more on our November 2022 blog.
Tealinc is here as your rail partner. We focus on rail equipment, rail fleet management services, and consulting services to help novice, mid-level, and expert shippers plan, modify and adjust short-term and long-term rail shipping and receiving needs. Contact Tealinc today, and we’ll engage with you in starting, adjusting, and modifying your shipment plan to help you best achieve success.