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3/27/2024
Citing a looming supply chain crisis amid a dwindling number of active boxcars in the United States, the Railway Supply Institute (RSI) yesterday filed a petition with the Surface Transportation Board (STB) seeking review of the current rules for setting compensation to boxcar owners.
In a press release, RSI officials said they are seeking changes to avert a "boxcar cliff." Current rules disincentivize the necessary construction of new boxcars to replace cars hitting their maximum operating age. As a result, the U.S. boxcar fleet size has declined by 38% since 2008 and is expected to decline another 22% by 2030, RSI officials said.
A major culprit in the decline is the Arbitration Rule, which keeps leasing rates paid by railroads for boxcars artificially low and therefore reduces incentives for new construction, RSI officials said. The rule was approved in 1994 by the Interstate Commerce Commission, the predecessor to the STB.
"America is plunging toward a boxcar cliff as many cars are hitting their 50-year expiration date and not being replaced because the Arbitration Rule suppresses boxcar rates far below competitive levels," said RSI President Patty Long. "The current car hire system discourages investment in this integral component of our rail transportation fleet, with boxcars providing efficient shipping for crucial American commodities. We can’t afford to fall off the boxcar cliff."
The RSI's petition is available for review here.