CSX considers flatcar buys with more commercial use
The Department of Defense has long talked about a critical military readiness issue: the aging fleet of commercial railroad cars.
While the military has talked, one of MTMC’s industry partners has gone to work.
CSX Transportation is engaged in a strong marketing campaign to increase its commercial use of railroad cars. It has brought the railroad some immediate gains. In one year, CSX’s annual revenues from moves of commercial agricultural and construction equipment will nearly double, from $2 million to $4 million.
“We have had some successes this year,” said Jon Meyer, senior account manager for CSX, who is spearheading the effort. “There is great synergy to have a single point of contact.”
In all, he thinks there is a $40 million dollar potential market for the movement of the oversized pieces of equipment. Most of this cargo now moves by truck.
With increased commercial business, said Meyer, CSX is considering the acquisition of new, state-of-the-art, chain tie-down flatcar rolling stock, as well as the new unilevel design. If the purchases take place, it will be the first acquisition of new flatcars by the railroad industry in several decades.
The railroads have not invested in new flatcars because of low customer usage, said Meyer. He cites industry statistics showing the majority of the 4,500 existing flatcars in the United States are more than 34 years old. The big crunch comes in 2014, when some 1,500 of these cars must be taken out of service because they will have reached a regulatory age limit of 50 years.
In a 1999 CSX usage study, the railroad found its 89-foot chain tie-down cards were used an average of only 3.5 times in an entire year. Worse, the 60-foot tie-down cars were used under two times per year, on average.
The rest of the time, the flatcars sit and were exposed to the elements.
Yet, in a national emergency, the flatcars would be a critical element to move oversized military equipment.
“This last summer, we stressed the fleet worse than since the Gulf War,” said Meyer.
Much of CSX’s new business is going by rail to Baltimore, Md.; Savannah, Ga.; and Brunswick, Ga.
Three factors are increasing CSX commercial flatcar freight, said Meyer. One is a process, a second is a supporting contractor, and the third is an innovative piece of equipment.
“The process innovation is a unit train,” Meyer said. “Commercial flatcar freight is collected in Chicago, and then moved as a single train of flatcars over the weekend.”
We’ve had a run from Chicago to Baltimore in 40 hours,” said Meyer. “That is pretty decent transit.”
The supporting contractor is TRANSFLO Corp., a CSX subsidiary headquartered in Jacksonville, Fla., that specializes in materials management and logistics services. TRANSFLO transships the rail cargoes from the railroad to the final destination.
“They serve the dealers,” said Meyer. “We get it close to the dealers by rail, and they make the final delivery by truck.”
The third factor is the new unilevel car developed by Trinity Rail and Trailer Train. The cars are fully enclosed for protection and use easy-to-apply restraining straps, instead of cumbersome chains, to Secure equipment.
“Ultimately, this will all benefit MTMC,” said Meyer.
MTMC railroad specialists are enthusiastic about the increased use of commercial flatcars.
“We’re getting away from the focus on physical equipment and now we have a policy for use of the equipment,” said Mark Metz, a veteran traffic manager who has specialized in rail operations.
The economics pushing the new equipment acquisition interested Don Simon, of the Distribution Analysis Center.
“They have incentivized the reinvestment in equipment,” said Simon. “This helps everyone. The bottom line is readiness.”
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