If you look at the railroad tank car statistics over the last couple of years, on any given month, about 10% of the tank cars are somewhere in storage. By itself, that’s a drain on the bottom line as you are likely paying monthly charges for storage, switch charges to get the car to and from the storage facility, the cost of transportation and, of course, if you’re like most companies, the monthly lease charges. That all adds up and there is nothing worse than an asset that isn’t producing. Of course, I did have one economist talk to me about how to make this work really well for a company but if it worked really well then why aren’t companies just buying railcars and parking them. I think we all know the answer. My question to you is, What have you done to prepare your cars for storage?
Consider a client ordering cars during the oil boom, when you couldn’t get enough railcars. By the time the cars were delivered there was no need for the cars, so the cars were parked in a midwestern state and sat there. These cars had never moved their first load but the changes in temperature from season to season created a greenhouse inside the car and the associated heat-cold cycles and resulting humidity triggered oxidation, rust blooms, and other deleterious effects inside the car. Placing this car back into service will necessitate a visit to a shop for some interior work amid much gnashing of teeth and a bit of disbelief on the part of the lessee.
Another scenario that we have seen with loaded cars involves those that have been gainfully employed and due to a downturn in traffic are also placed in storage temporarily. Ask yourself, what type of atmosphere will be generated inside the car while it is sitting there waiting for return to service. Will the internal atmosphere in the car generate oxidation and corrosion that will seep into the valves or cause deterioration of gaskets and O-rings?
Your personnel will know the answers to this so why not have the conversation before being surprised by additional costs and delays putting your stored cars back into service. While the cars are sitting there, this is also a great time to inspect for regulatory standards such as freight car safety standards, safety appliance and brakes. Can you think of anything worse than getting the cars out of storage and on the way to the customer only to have them re-directed to a shop, getting repairs that could have been made in a more cost-effective manner while the car was idle. It is certainly much easier to control cost when you are the decision maker. When the car is “bad ordered” the decision has been made for you.
For the foreseeable future, with traffic on the nations’ railroads in flux, tank cars and all other cars will unfortunately be idle from time to time. Why not plan ahead and anticipate what has to be done to get your cars back into service and revenue generation as quickly as possible. Tank cars can benefit from gas padding to keep internal parts free from corrosion in long term storage and all cars benefit from a thorough general inspection to ensure their components are in proper working order.
