Equipment Finance '91 will focus on the shipper role - Chicago exhibit - column

Railway Age, Dec, 1990 by Anthony Kruglinski

Editor's Note: Railroad Financial Corporation and Railway Age will present Rail Equipment Finance 91-Shipper Driven on March 17-20, 1991 at the Westin Hotel in Chicago.

We've said it often enough-the shipper's role in railcar decisions is significantly more important than that of the car's owner or any financing party. For instance, tens of thousands of boxcars have been rebuilt in recent years with the money going-in large part-to renew them for roles in paper and auto parts service. When a Plate B boxcar is completely rebuilt and has its roof raised to make it into a Plate F, it's because shipper loading patterns have made railcar interior height an issue. When the same car has an entire new interior added that's not required to get the car Rule 88 status (increased car hire and a new birthdate for interchange purposes) it's because the car's owner feels the extra $3,000 to $4,000 is well spent in the pursuit of new shipper business.

When it comes to new cars, it's generally the shippers: needs that call the shots on car design and number. For instance, this year the Wisconsin Central Ltd. took delivery of 400 new 3,000 cubic foot covered hopper cars for roofing granule service. This was the biggest order for new railcars ever placed by a regional railroad, a big expensive move for the railroad then less than three years old. The cars were designed with the railroad's existing and potential shippers in mind and a number of shipper designed feature add-ons raised the cost significantly. However, the original order for new cars was only 250 cars! An additional 150 were tacked on to the order when shipper reaction was so favorable to the new cars that the railroad saw new business as a result and a need for more cars developed.

We could go on and on.

However, what we've decided to do, instead, is to focus our Annual Rail Equipment Finance Conference on the issue of the shipper's role in railcar supply, configuration and value. We're calling this year's meeting Rail Equipment Finance 91-Shipper Driven and we mean it! As we do every year, we'll devote two days to a North American Railcar Review which will cover each car type intensively with data on national fleet sizes and additions and retirements. However, this year we'll increase our shipper participation and try to determine what the shippers will require in the way of new and rebuilt railcars as a way of backing into prospects for the entire national fleet. The reaction we've had from shippers and railroads so far has been enthusiastic.

Those of our readers who attend Rail Equipment Finance primarily for the third day of the conference (PowerPower-Power) won't be disappointed with this year's program. Day 3 will still be dedicated to motive power-new, used and rebuilt. We'll cover developments in high, medium and low horsepower locomotive leasing as well as the "black box" electronic add-ons that have been developed to jump locomotive generations in a single bound! But, we're also planning something special for our shipper attendees. Power-Power-Power will be accompanied by a concurrent industrial Railroad Locomotive program for shipper-owned railroads concerned with low horsepower switchers and switching services. We're hopeful that many of the hundreds of industrial railroads that receive Railway Age, but who have never had a reason to attend Rail Equipment Finance, will join us in Chicago on March 20,1991 for a day devoted to their needs in motive power. ut back to railcars. What breaking issues will Rail Equipment Finance '91 tackle? Here are a few of them:

Car Hire Deprescription. A recent filing with the ICC has the potential to completely change the way railcar owners are paid for the use of their cars by third parties-with a likely ultimate dramatic impact on car supply and price. The proposal's proposed effective date for deregulating new and rebuilt cars-January 1, 1991-is already having an effect on new car and rebuild markets. We'll have both sides in this battle of titans available to discuss deprescription and its likely benefits and costs for all parties.

Hazmat Tankcar issues. The world of rules and regulations concerning regulated materials carried in tankcars is constantly changing and impacting car supply and cost. All of our aftendees-railcar builders, servicers, operators, financiers and shippers-will benefit from our review of new hazardous material and related car supply issues.

Clean Air and Coal Cars. The new Federal Clean Air Act is already having a dramatic effect on which coal is likely to move where to meet new standards. We'll explore the makeup of today's fleet and likely impacts on coal car supply, design and costs.

Graincar Developments. While the seemingly endless debate between some railroads and shipper car owners continues, there are signs that both sides are stabilizing their situations. Railroads are buying new cars and shippers aren't. Once again we'll tackle this tough subject, but this year we'll have a greater shipper participation than ever before.