ISRI Convention: Riding Along with Prosperity

Both the scrap industry and the freight rail industry are enjoying healthy global markets. But along with the prosperity has come the headache of finding enough rail cars to keep scrap moving via rail.

For the second year in a row, the rail freight network was the topic of a session at the ISRI (Institute of Scrap Recycling Industries Inc.) Annual Convention, which took place April 18-21 at the Ernest N. Morial Convention Center in New Orleans.

The availability of gondola cars (gons) was again a topic of conversation at the session. “When you talk about availability, factors include geographic flows and patterns,” remarked Dennis Wilmot, a logistics services provider with WT&L Corp., Aurora, Ohio. Some places have a more pronounced gondola car deficits than others, Wilmot remarked. He cited the North as a region that is typically short of cars.

Representing the railroads, Brenda Wheeler of CSX Transportation, Jacksonville, Fla., said the gondola car supply situation is “a continuing battle.”

Moderator Greg Dixon of Baker Iron & Metal Co., Lexington, Ky., expressed concern that the average annual age of gondola cars (25 years) could work against any efforts to reinforce the fleet.

Solutions mentioned included allowing old gondola cars to stay in service for 60 years, rather than the current 50-year limit imposed by regulatory authorities. CSX’s Wheeler also said that her company is re-investing in cars, both by refurbishing cars and ordering new ones.

Some scrap companies are gaining more control over the situation by ordering their own private fleets of gondola cars. Wheeler said the ownership of private fleets has become customer in many other industries, with scrap gondola cars being among the last segments with majority ownership still in the hands of railroads.

Among the situations that can keep good cars out of service is the presence of dirt at the bottom of gondola cars. Wheeler said the process to clean out such cars can take CSX 25 to 45 days from the time such cars are identified until they are redeployed. “It’s an expense [CSX wishes] it didn’t have to pay for,” she also remarked.

Beyond needing more cars, the overall freight rail network may also need more track miles to serve a nation where goods and commodities are taking longer journeys from production to market. “The capacity right now of the rail system is very constrained,” said Wilmot. “It does not allow much room for growth.”

Panelist Billie Johnson of ISRI expressed hope that a coalition of major rail shippers will make some headway with the 110^th Congress to push for increased oversight and investment of “this incredibly important aspect of the economy.”