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Boxcar Cliff Overview: The Imperative of Reforming Boxcar Hire Rates

By Railway Supply Institute

Transportation of goods by rail is at a pivotal turning point; a phenomenon known as the “boxcar cliff” has emerged as a significant threat to the balance and efficiency of cargo movement. Understanding this issue is vital, not only because of economic impacts but also due to its environmental and safety implications. For each boxcar unavailable to carry goods the repercussions are immediate – the equivalent of three heavy truckloads is added to our already congested roadways, exacerbating traffic, worsening road conditions, and significantly increasing carbon emissions. 

The “boxcar cliff” describes a situation where the unavailability of boxcars requires shippers to increase the use of trucks as a mode of transport. While a shift to trucks is a viable short-term alternative, the long-term effects are cumulatively detrimental to our highways and the environment. It’s a multi-layered issue that impacts not only businesses’ bottom lines but also public health, road safety, and environmental stewardship. To counteract this, we must explore a strategic overhaul of boxcar car hire rates, integrating flexibility and considering the broader consequences on traffic and pollution. 

It’s incumbent upon regulators and stakeholders within the transportation industry – particularly members of the Surface Transportation Board who oversee and resolve railroad rate and service disputes – to advocate for a more sustainable approach. One compelling response involves adjusting hire rates and terms to make rail more competitive and accessible. Such restructuring could offer a dual advantage: preventing the looming logistical crunch and significantly trimming carbon emissions by keeping freight on tracks and off the roads. 

Reform advocates argue for a sensible recalibration of boxcar hire rates – a strategic move supported by both environmental and economic testimonies. “For every boxcar sidelined by prohibitive costs, we’re effectively undoing the environmental benefits by tripling the number of trucks on the road for the same load,” a leading transportation economist remarks. This underscores the cascading benefits of rail over road transport when considering fuel efficiency and reduced emissions. 

Moreover, it’s worth noting that the rail network has historically been a backbone of the nation’s transport infrastructure, supporting the smooth movement of bulk commodities and fostering domestic trade. Hence, addressing the boxcar shortage and rate crisis is not just an intervention – it’s a restoration of a system essential to our supply chain’s efficacy and the well-being of our environment. 

To that end, practical and collaborative solutions must be advanced. Crafting a more reasonable and equitable rate structure that aligns with market realities not only ensures the stability of the rail transportation sector but is also a step towards a greener future. Ultimately, through careful examination of the boxcar cliff issue and a commitment to a forward-thinking resolution, we can preserve this fundamental cog in the American transportation machine, safeguarding both our economic and environmental health. 

Read the RSI Petition to the Surface Transportation Board to reconsider the car hire default rate process.

 

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