Railcar utilization rate explained
This rate tells us how many railcars are required to carry rail freight.
Railcar Utilization Rate is the percentage of the total railcar population required to move North American rail freight. A rate above 90% signals a tight market; below 80% signals a weak market with significant idle capacity.
What do Railcar Utilization Rate benchmarks mean? A figure above 90% indicates a tight market where the majority of the railcar population is at work. A figure below 80% indicates a weak market where a significant portion of the population is idle or underutilized. Note: FTR updates the Railcar Utilization Rate on a regular cadence using data sourced from the North American rail freight system. Contact your FTR representative for the latest data and publication schedule.
Why the FTR Rail Utilization Metric differs from sources like AAR
The FTR Rail Utilization Metric equals the number of railcars required to haul freight divided by the total fleet. This figure is always lower than the utilization figure published by the Association of American Railroads (AAR) because AAR removes any car that has not moved in 60 days, reducing the denominator and producing a higher overall utilization rate. Key differences between FTR and AAR methodology: - FTR denominator: total fleet, including cars inactive for any reason - AAR denominator: fleet minus cars idle for 60 or more days - Result: FTR's utilization rate is consistently lower than AAR's
Why does FTR include cars idle for 60 or more days in its fleet count? FTR does not remove cars from the fleet simply because they have not moved in a given period, because there are normal events in the life cycle of a railcar that could cause it not to move for 60 days. The most obvious example is a railcar being shopped (undergoing scheduled maintenance or repairs at a facility) for at least 60 days. That car is still part of the active fleet even though it is undergoing routine maintenance in a shop. For this reason, FTR's methodology retains these cars in the overall utilization calculation, providing a more comprehensive and accurate view of true fleet availability.