LOS ANGELES A
growing number of steel buyers in the western United States are
concerned by what they claim is a shortage of flat rail cars
and efforts by mills to use gondolas instead.
While the problem
isnt seen as universal, and some steel buyers are more
bothered than others, more service centers in particular are
citing this trend.
"They want to send
gondolas," a California plate distributor source said about his
mill suppliers, maintaining this is less efficient than using
flat cars. "We can do it if push comes to shove, but its
"The market for flats
appears to be underserved," said a plate mill executive, who
agreed that there arent enough of the cars available. He
said plate buyers prefer flat cars over gondolas for safety and
"We dont take
(gondolas)," said another service center executive, who
conceded that his company might nevertheless do so in an
"extreme" emergency. He said mills lately are "always asking"
his company to accept gondolas instead of flat cars.
Plates are usually
unloaded from flat cars with a forklift, buyers pointed out,
while loading gondolas usually means they need forklifts with
spreaders or overhead cranes.
Moreover, for some
plate products shipment by gondola just isnt practical,
said a third distribution executive, citing the example of
light plate 3/16-inch thick by 120 inches wide by
480 inches long. "Its just not going to work," he
Although long products
such as structural shapes werent cited as often, the
possibility of the steel shifting makes at least one service
center executive uncomfortable. "We dont want to put our
workers inside the cars to hook up beams," he said.
The mill executive
pointed out that, unlike what often occurs with trucking
companies, railroads so far havent reacted to the pinch
in flats by charging higher ratestheres just a
"lack of availability." With trucks, by contrast, "if
youre able to pay more, theyll find a way to send
you more trucks," he said.
Some market sources
think part of the reason for the pinch in flat cars is due to
rail car builders emphasis during the past year on tank
cars as they look to cash in on a strong market for
transporting petroleum products.