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Right-Sizing your Rail Fleet

Forecasting volume demand is an exercise in predicting the unpredictable. We constantly hear this from freight shipping partners.

And, the last few years have only made this herculean task more challenging. With changing circumstances and variables has come swift and orchestrated internal responses to (re)evaluate how to estimate industrial transport investments. Countless Zoom meetings across scenario planning, market insights, data analysis, and supply chain systems.

Even the most thorough models can miss if they do not properly account for unforeseen trends in the rail industry.  

These are the types of conversations we have with partners every day. As they get more sophisticated with internal planning, there’s even more of a need to better pinpoint the key variables in landing on a “right-sized” leased fleet. 

The topics vary by partner, industry, and need, but the themes remain the same.

Clint Ashmead, Commercial Lead West, recommends a sample of some of the daily discussions he has with partners. 

Budget for inconsistent transit results and unreliable fluidity with Class 1 Railroads 

Many partners are experiencing network backlog and congestion that’s directly influencing service reliability and turn time on equipment. This may not be universal but delays of productivity can be between 25-50%. These issues often range from workforce staffing constraints, precision railroading growing pains, locomotive shortages, or congestion at the origin or destination of deliveries (first-mile/last-mile). While challenges in fluidity varies, commodity freight is seeing delivery lags and some railcars are not always getting returned on time, either leading to supply chain delays or unexpected demurrage costs. 

Partners are getting more sophisticated in how they are planning for railroad transit inconsistencies, adjusting volume forecasting and fleet productivity and utilization.

Long term fleet requirements and increasing demands for railcar utilization 

Utilization pressures are more common across rail freight. In addition to railroad congestion, shippers are analyzing how to match increasing demand with inflationary costs for new railcar builds. Many partners are having to take a fresh look at ensuring they have the necessary equipment that meets their seasonal needs, unit-volume forecast, fiscal budget, and long term requirements. The right mix of railcar type is a key part of “right-sizing” your go-to-market investment. 

This is why it is so important to AITX to have a broad and diverse fleet, not only across car type and commodities served, but also across railcar life-cycle. We are actively working with several railcar manufacturers and have committed to a significant new-build railcar acquisition so customers have life-cycle options.  

We take pride in partnering with our customers to first help them understand the right fleet mix and then make sure we have the right equipment to match those needs. 

Maximize repair and maintenance programs to optimize your current fleet 

Many partners proactively see the advantage of a full-service railcar partner that pairs a leasing relationship with a suite of repair options. With utilization pressures, there is an amplified need to ensure cars are productive and maximize uptime and useful life. With network congestion and precision railroading, there are windows for mobile repair services that sidestep exhaustive fees coming with railroad servicing. And, with committed repair networks and flow from tank qualifications, it is valuable to have a partner who can outline and schedule a custom repair and upkeep plan based on your business and the current market conditions.

In this current industrial transport market repair networks have a nice volume of business, so having a partner with your interests front-and-center is part of “right-sizing” your equipment requirement. Understanding seasonal cycles and turn times, helps you maximize your fleet and keep your investment up-and-running. We are listening to our customers’ needs and expanding both our full-service and mobile network to be where they need us most. 

Go to the Available Assets section of our Leasing page to see some of our spotlight car-types available to meet seasonal needs across industries.