What Does Decreasing Boxcar Fleet Mean for U.S. Capacity?

IMG_2123Part of my job is to watch transportation trends and help our customers prepare for what might happen next. So when three customers asked me the same question recently—was a capacity crisis coming with so many boxcars going out of service?—I immediately took steps to look into it.

I called upon the CyBIZ Lab at the Iowa State University College of Business to look at the implications for equipment and rates in the coming decades. The CyBIZ Lab students, undergraduates in this case, read publicly available information, talked to our customers about the issues, and interviewed TTX, the consortium leasing company for all major railroads that buys and maintains the boxcars. Their report on Surface Transportation is available for all to read.

I could certainly see why these shippers were concerned. The government mandates that boxcars be removed from service when they are 50 years old. About 57% of the current boxcar fleet will be retired in the next 15 years, and orders for new boxcars stand at only 0.49 percent of all freight car orders.

As it turns out, the story of the disappearing boxcars seems to be one that is best understood through the data and in the eyes of individual shippers and the industries that leverage these assets.

  • The current boxcar fleet consists of 115,000 cars; 65,276 boxcars will retire over the next 15 years. But new technologies, such as newer boxcars with higher freight capacities, are slowly replacing the older versions. At the same time, this isn’t an absolute solution; older infrastructure can’t handle the larger freight cars, especially in the northeast.
  • Railroads own more than 75% of all boxcars; the average age of these boxcars is close to 30 years. Privately-owned boxcars account for 22% of the market, and boxes have an average age of 19 years. It appears that railroad companies do not foresee a need to increase their ownership or increase their orders for new boxcars in the near future. In fact, they provide incentives and reduced rates to those who use private freight cars instead of using the railroad’s fleet.
  • Fewer industries today—especially paper, beer, plywood, and metals—still rely on boxcar use. Products that have traditionally shipped by boxcars are now being moved on newer types of freight cars that are more efficient. Lumber is now shipped on center beam flat cars, which can haul more product per car than boxcar, and are easier to load and unload. Auto manufacturers have moved manufacturing facilities closer to suppliers, making trucks a more economical transportation choice.
  • Boxcar fleets are shipping a decreasing number of shipments. In the last 10 years, rail ton-mile shipments have decreased 42% for lumber/wood, 42% for motor vehicles and parts, and 13.2% in pulp and paper. In addition, railroads find boxcars less attractive than unit trains. Boxcars cost $135,000 each, and they have higher dwell times and lower turns than much more profitable unit trains—large trains with similar equipment that go point to point without stopping.

The full effect of the boxcar decline might not be felt for the next decade. One big unknown is whether the retirement of the U.S. boxcar fleet is following the same pattern as the decrease in boxcar demand. It’s unlikely that railroads will stop serving boxcar shippers, but they may underinvest in boxcars, whether intentionally or because they decide to invest in other types of equipment, as was the case when they saw a surge in demand for tanker cars during the U.S. oil boom.

While the loss of boxcars will undoubtedly be very impactful to some shippers and industries, it doesn’t appear it will affect companies equally. Those who can ship with widely-used boxcar equipment and can adapt to the newer 60’ cars vs. the older 50’ cars will likely see less impact. Companies are likely to see more impact if the equipment used is unique, or the corridors they need to serve lose capacity to an extent that leaves their business short. At this point, it does not seem clear where potential loss of capacity will be most disruptive, with the exception of those shippers who are already keenly aware of the uniqueness of their situation. It seems today that capacity retirement and replacement may keep pace with the nationwide carload demand.

The prudent approach is to watch this wave a bit more to discern if it will settle or crash on the shore. Those heavily in this mode are actively working to extend the mandatory retirement age and collaborate with the railroads to help increase the car utilization to get the most out of the aging fleet for as long as possible. Finally, at this time, we do not yet see a clear mode shift issue that will challenge Intermodal or truck demand. The appropriate action today seems to be maintaining a line of sight to this as it unfolds and the effect on other modes.

You can read the entire research report and analysis focused on the declining boxcar fleet and the effects it will have on other modes of surface transportation in the United States by reading the Surface Transportation white paper. And if you question whether you’re seeing a trend in the industry, don’t just wonder. Send an email or call me. C.H. Robinson is a founding member of the CyBIZ Lab. These undergraduate and graduate students are prepared to act as research consultants for our industry to keep all of us ahead of the curve.

Steve has been with C.H. Robinson since 1989. He currently supports strategies designed to enhance the realized value that logistics operations have on supply chain and business initiatives. Steve is a graduate of Minnesota State University, Mankato and serves on two university supply chain advisory boards.


  1. Great article. Retiring boxcars made in the boomer generation. Now both of these valuable resources, boxcars and boomers, will need to be replaced so we don’t lose valuable assets and capabilities in our economy. Not sure the infrastructure is in place to make timely replacements in either of these areas happen.

  2. Great article, Steve! Thank you for allowing our students to research this topic! We always appreciate the opportunity to work with you to provide “real world” education to our student team.

  3. Hi Steve – great article. Do you know how/where I can download the white paper you reference? I tried searching around but couldn’t find anything…

  4. Interesting article. There is still a place for box cars in many supply chains and I agree railroads will not be investing in many new box car assets. It will be up to beneficial cargo owners working with leasing companies to supply box car assets in the future. With driver shortages, decaying highway infrastructure, and road congestion, there will be a place for box cars that are properly managed.

  5. Great article…another point I didn’t see and wondered about – I’m admittedly uncertain if this is more anecdotal and not a statistical indicator or if this is a tend that will affect the shipping (truckload, rail, or intermodal) – is whether or not the trend to buy local will decrease the need for boxcars and/or other shipping capacity.

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