GATX: Precision Scheduled Railroading dampening demand for freight cars

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CHICAGO — Some portions of the North American railcar fleet of transportation leasing company GATX are being idled due to Precision Scheduled Railroading.

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.

NEWSWIRETrains News Wire

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