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Speaking of private car rosters

Dave & Libby Nelson <muskoka@...>
 

As it appears it was a smart move to form all of the reefer and tank car
companies, why didn't other car types and commodities get addressed this way
too? Fer instance, 50' boxcars with auto racks (or in later years, the
autorack cars). Or plain jane coal hoppers running between Gary Indiana and
the Pocohontas coal belts? Or any covered hopper? Or depressed flatcar?
Superficially at least, it appears these situations are not far off of
reefers from California -- loaded one way and returned empty.

So why wasn't it done?
-----------------------------------
Dave Nelson

thompson@...
 

Dave Nelson asks:
As it appears it was a smart move to form all of the reefer and tank car
companies, why didn't other car types and commodities get addressed this way
too? Fer instance, 50' boxcars with auto racks (or in later years, the
autorack cars). Or plain jane coal hoppers running between Gary Indiana and
the Pocohontas coal belts? Or any covered hopper? Or depressed flatcar?
Superficially at least, it appears these situations are not far off of
reefers from California -- loaded one way and returned empty.
So why wasn't it done?
Dave, I think the specialized nature of tank car and reefer traffic had
inhibited railroads from wanting to own very big fleets, so private owners
tended to do the job, and got the attractive boost of the mileage payments
instead of per diem. But this didn't and doesn't apply to "plain jane coal
hoppers" or most any other car type.

Tony Thompson Editor, Signature Press, Berkeley, CA
2942 Linden Ave., Berkeley, CA 94705 http://www.signaturepress.com
(510) 540-6538; fax, (510) 540-1937; e-mail, thompson@...
Publishers of books on railroads and on Western history

Dave & Libby Nelson <muskoka@...>
 

-----Original Message-----
From: thompson@... [mailto:thompson@...]
Dave Nelson asks:
As it appears it was a smart move to form all of the reefer and tank car
companies, why didn't other car types and commodities get
addressed this way
too?
Dave, I think the specialized nature of tank car and reefer traffic had
inhibited railroads from wanting to own very big fleets, so private owners
tended to do the job, and got the attractive boost of the mileage payments
instead of per diem. But this didn't and doesn't apply to "plain jane coal
hoppers" or most any other car type.
But wouldn't that fat mileage payment create an opportunity for the
regulated carrier to: a) avoid a capital investment on its books and the
attendant approval process and b) provide the shareholders equal to or
greater return (the greater return comes from non owning roads paying that
mileage fee)? Or were the milage fees and per diem payments roughly
equivalent?

Dave Nelson

Garth G. Groff <ggg9y@...>
 

Dave,

I suspect we have economics and accidents of history to explain why tank
cars and reefers (and to a lesser extent stock cars) were privately
owned, but other car types were not.

Most of these cars were (a) specialized, especially when fitted up for a
particular industry or commodity, and (b) fairly low use compared to
general freight cars. IIRC, most railroads were reluctant to invest in
such specialized cars due to the lower dollar return. So much for the
economics. As for history, Armour tried to corner the market on
refrigerators at the turn of the century, and Standard Oil attempted the
same with tank cars. These companies put considerable pressure on the
railroads not to compete, or lose through routing of the monopoly-owned
special cars. This kept railroads out of the game, and allowed other
private players (or railroad-owned consortiums) to move into this niche
when Armour and Standard Oil lost their monopolies.

As for other car types, consider that Trailer Train, Railbox, and
Railgon more or less did/do offer "private" fleets of cars for hire
today. Of course, these ventures are owned by participating railroads,
but the companies are managed independently.

Kind regards,


Garth G. Groff

Dave & Libby Nelson wrote:


As it appears it was a smart move to form all of the reefer and tank car
companies, why didn't other car types and commodities get addressed this way
too? Fer instance, 50' boxcars with auto racks (or in later years, the
autorack cars). Or plain jane coal hoppers running between Gary Indiana and
the Pocohontas coal belts? Or any covered hopper? Or depressed flatcar?
Superficially at least, it appears these situations are not far off of
reefers from California -- loaded one way and returned empty.

So why wasn't it done?
-----------------------------------
Dave Nelson

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thompson@...
 

But wouldn't that fat mileage payment create an opportunity for the
regulated carrier to: a) avoid a capital investment on its books and the
attendant approval process and b) provide the shareholders equal to or
greater return (the greater return comes from non owning roads paying that
mileage fee)? Or were the milage fees and per diem payments roughly
equivalent?
Well, remember, Dave, all the OTHER carriers would have to agree, or
convince the ICC to permit it. I don't know that it was a FAT payment, but
if so, the ICC would certainly have had an input.
But I don't think this is something you can reason through. It is
probably largely history, as Garth Groff observed, and I would concur.

Tony Thompson Editor, Signature Press, Berkeley, CA
2942 Linden Ave., Berkeley, CA 94705 http://www.signaturepress.com
(510) 540-6538; fax, (510) 540-1937; e-mail, thompson@...
Publishers of books on railroads and on Western history

Dave & Libby Nelson <muskoka@...>
 

-----Original Message-----
From: thompson@... [mailto:thompson@...]
Well, remember, Dave, all the OTHER carriers would have to agree, or
convince the ICC to permit it.
Was that the case with the PFE? GATX?

I don't know that it was a FAT payment, but
if so, the ICC would certainly have had an input.
Did the ICC have any regulatory authority over private car lines? Perhaps
the dollar value of the mileage charge, but I thought nothing else (wasn't
it the FRA who regulated safety features of any cars, public or private?).

But I don't think this is something you can reason through. It is
probably largely history, as Garth Groff observed, and I would concur.
Well, yeah, it is safe to say R.R. mgmt was, ahem, less than visionary. I'm
trying to understand if the reasoning in this particular issue was
financial, legal, or intellectual, especially by the 50's as more and more
specialized cars came into service and car pools can into use. Sounds like
both you and Garth lean towards the later - correct?

Dave Nelson