There Is No Shortage of Freight Cars--Railroads Must Make Better Use of What They Have

CED-81-2: Published: Nov 10, 1980. Publicly Released: Nov 10, 1980.

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Railroads cannot satisfy the demand for freight cars, because they do not use the existing car fleet efficiently. Enough cars are available, but they are in the right place at the right time.

GAO found that, because the Interstate Commerce Commission's (ICC) authority is limited and other federal agencies lack authority over car availability, federal efforts to improve freight car utilization have not been too successful. As an aid to the industry, the recently approved Staggers Rail Act of 1980 authorizes that federal funds available to assist railroads can be used for car management systems to improve car utilization. However, the Act will not necessarily make funds available to all railroads that might be interested in such a system. Although shippers have persistently complained of their inability to obtain freight cars on demand, unfilled orders never exceeded 4 percent of the serviceable fleet from 1973 through 1978. Moreover, data on unfilled car orders is of questionable accuracy, because shippers are thought to inflate their orders during peak demand periods. The courts have ruled that ICC may not impose performance standards; therefore, ICC has traditionally approached the freight car problem by restricting or directing the movement of particular cars. Rather than adding more cars, the freight car problem could be reduced in the long run through technical and economic changes. The railroads could improve utilization and balance distribution by developing and using a computerized, nationwide system of car management. The Federal Railroad Administration (FRA) has sponsored studies which are informative and appear to offer solutions. However, operational improvements alone will not solve the inability of shippers to obtain freight cars on demand.

Recommendations for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Chairman, Interstate Commerce Commission, should work with the Administrator, FRA, and the railroad industry to develop the technology and cooperation needed to implement a compatible management information system for better freight car utilization.

    Agency Affected: Interstate Commerce Commission

  2. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Transportation should direct the Administrator, FRA, to continue to develop and demonstrate improved railroad care management and control methods that could be used in a compatible nationwide system, and to use available assistance programs to encourage railroads to install and use such systems.

    Agency Affected: Department of Transportation

  3. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Chairman, ICC, should prescribe specific criteria for issuing emergency car service orders and establish a system to control and evaluate the effects of these orders. The Chairman should also study whether demurrage encourages shippers to release cars faster and whether prompt release results in more efficient car use.

    Agency Affected: Interstate Commerce Commission

 

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