TTX COMPANY - Company Profile, Information, Business Description, History, Background Information on TTX COMPANY



101 North Wacker Drive
Chicago, Illinois 60606
U.S.A.

History of TTX COMPANY

TTX Company, which is privately held by 15 U.S. railroad companies, owned and managed a fleet of 98,666 cars as of September 1, 1992. TTX's fleet includes intermodal cars of various types, flatcars with attached multi-level racks, box cars, gondola cars and special-use cars for such commodities as lumber and heavy machinery. TTX employs more than 1,500 people at its Chicago headquarters and its facilities across the nation.

While 'piggy-back' transportation of horse-drawn wagons, and later highway trailers, on railroad flatcars was performed sporadically by individual railroads as early as the 1850s, the concept became popular with the shipping public only after the Korean War. However, the growth of piggyback, or intermodal, transport was limited by the absence of standards for flatcar design, particularly trailer tie-down devices, and the uncoordinated control of flatcars by the individual railroads, which resulted in low utilization.

TTX was formed to satisfy the increasing demand from railroads and their customers for a fleet of standardized intermodal flatcars under unified control at the lowest possible cost. Efficient utilization of intermodal flatcars is achieved through the pooling of these cars under TTX management. Unlike cars owned by the individual railroads, TTX cars need not be returned empty to the owning railroad after they are unloaded by another railroad. Instead, the cars can be reloaded and transported to any other destination where they can be reloaded again. If no loads are immediately available, TTX directs the movement of the empty cars to the closest location where loads are waiting. TTX's efficiencies and economies of operation are illustrated by the fact that, while TTX owns 8 percent of the U.S. railroad car fleet, its cars account for 24 percent of all the car miles traveled in the United States. Since TTX cars are used more intensively and efficiently than railroad-owned cars, TTX can supply them at a lower cost per load.

TTX was incorporated as Trailer Train Company in Delaware on November 9, 1955. Its initial railroad stockholders were the Pennsylvania Railroad and the Norfolk & Western Railway. TTX began operations on March 17, 1956 with a fleet of 500 75-foot flatcars. As the length of the standard highway trailer increased to 40 feet during the fifties, TTX introduced 85-foot and 87-foot flatcars capable of carrying two such trailers. TTX acquired its first 89-foot flatcars in 1961, and cars of this length became the industry standard for the next two decades. Some of these cars had low decks permitting piggyback operations over the older Eastern railroads, which were constrained by tighter clearances than their Western counterparts. By 1964, 41 railroads, including virtually every major line in the United States, had become a TTX stockholder. (The number of stockholders subsequently decreased to 15 due to mergers and withdrawals from the railroad industry.)

Railroads initially used chains, blocks, and jacks to attach trailers to flatcars, but this method was time-consuming and labor-intensive. A TTX employee introduced the concept of a collapsible hitch which could be raised and lowered quickly and efficiently by one worker using a power winch. This innovation, which both cut costs and improved ride quality, was subsequently produced by American Car and Foundry and quickly became the industry standard. An improved hitch, powered by the tractor used to load and unload the trailer, was introduced in 1966.

TTX began supplying 89-foot cars for motor vehicle movement in 1962. Prior to World War II, the railroad industry had dominated motor vehicle transportation, but as highways improved, the railroads' share of this market dropped to 10 percent by 1959. To regain this traffic, the railroads and their suppliers designed bi-level and tri-level racks carrying eight to twelve vehicles, each of which could be attached to the standard 85-foot and 89-foot flatcars operated by TTX. If traffic patterns changed, the racks could be detached and the cars returned to piggyback service. This innovation, which cut costs and improved the condition of the vehicles at their destination, proved popular with the manufacturers. By the 1980s, the railroad industry had recaptured nearly 60 percent of the vehicle transportation market, a position it maintained into the 1990s. In 1992 TTX continued to supply thousands of 89-foot flatcars for this service.



During the mid-1960s, TTX began to supply specialized flatcars designed for transportation of lumber, machinery, agricultural equipment, vehicle frames, and pipe to the railroad industry.

To provide reliable service at the lowest overall cost, TTX has always maintained its car fleet to high standards. In 1991 for example, TTX achieved 92 percent utilization of its intermodal fleet and 97 percent utilization of its flatcar fleet assigned to motor vehicle service. At first maintenance was performed by the individual railroads and independent car shops. However, as its fleet grew and aged, TTX determined that the most cost-effective approach would be to operate its own repair shops. TTX acquired its first shop on February 21, 1974, when it consummated its purchase of Hamburg Industries, operator of a repair facility at Hamburg, South Carolina. TTX subsequently constructed or acquired repair shops at Mira Loma, California, Jacksonville, Florida, and Drayton Plains, Michigan. In 1984, TTX established its first Field Maintenance Operation (FMO), which employs mobile repair vehicles to perform running maintenance on TTX cars when necessary, avoiding unproductive trips to repair shops. TTX operated 38 FMOs in 1992.

On January 14, 1974, the American Rail Box Car Company, or Railbox, was incorporated as a subsidiary of TTX. At that time, high-quality boxcars were in short supply. The mission of Railbox was to establish a pool of standardized, high-quality 50-foot boxcars that, like TTX's flatcars, could be freely reloaded to any destination, thus optimizing utilization and efficiency. Railbox's car ownership peaked at 24,966 in 1981 and subsequently was reduced to 13,174 as of December 31, 1991, due to oversupply and declining demand for that type of equipment.

Another TTX subsidiary, Railgon Company, was incorporated on May 24, 1979. Railgon acquired a fleet of standardized, high-quality gondola cars which, like Railbox cars, are pooled and can be freely reloaded for optimal efficiency.

Changes in the dimensions of highway trailers and the introduction of intermodal containers led to changes in TTX's flatcar fleet. TTX acquired the first 'all purpose' 89-foot flatcars equipped to carry either trailers or containers in 1966. By the early 1980s, highway operation of 45-foot trailers had become legal, and TTX modified thousands of its 89-foot flatcars to carry two trailers of this length. The introduction of 48-foot, and later 53-foot, highway trailers, however, necessitated the acquisition of new types of rail cars. Prominent among these was the five-unit articulated Spine car design, added to the TTX fleet in container-only configuration starting in 1986 and in all-purpose (trailer or container loading) configuration starting in 1989. These cars can carry trailers or containers up to 53 feet in length.

During the 1980s, ocean carriers began acquiring vessels too large to fit through the Panama Canal for their trans-Pacific trade. To reach markets on the East Coast and interior points, these carriers began moving large quantities of containers across the U.S. by rail on double-stacked, five-unit well cars. TTX acquired its first 320 double-stack cars in 1985. By 1991, double-stack cars made up over one-third of TTX's intermodal capacity, and 74 percent of the intermodal cars were equipped to carry containers. TTX's fleet includes single-unit and three-unit drawbar-connected cars with 125-ton trucks, capable of carrying two stacked 48-foot containers, as well as the five-unit design.

Updating the intermodal fleet to satisfy the demands of railroad customers has required substantial investment. From 1987 through 1991 TTX acquired over $1 billion worth of new equipment.

In 1991 TTX acquired 21 heavy-duty, depressed-center flatcars for transportation of heavy equipment, including transformers and pressure vessels.

TTX derives its revenues from its railroad owners in the form of charges for the use of its cars. These charges, which are set by TTX's Board of Directors, include two components: time and mileage. TTX charges no more for use of its cars than is absolutely necessary to recover the cost of owning the cars and maintaining them to high standards. In 1991, TTX's revenue was $621,468,000.

TTX's pooling operations are subject to the jurisdiction of the Interstate Commerce Commission (ICC). The TTX and Railbox pools were approved by the ICC in 1974, while the Railgon pool was approved by the ICC in 1980. The flatcar pooling agreement among TTX and its participating railroads that was approved by the ICC had a 15-year term. In 1989, the ICC re-authorized this pool for an additional five-year period.

Trailer Train Company changed its name to TTX Company on July 1, 1991, to better reflect the broadened scope of its activities. During that year, TTX also commenced a major quality improvement effort, which includes vendor evaluations and internal review of maintenance facilities.

Additional Details

Further Reference

'How TTX Tracks Quality,' Railway Age, April 1992.'Where Intermodal Is Headed: A TT View,' Railway Age, March 1990. 1991 Annual Report, TTX Company, Chicago. 1988, 1989, 1990 Annual Reports, Trailer Train Company, Chicago. American Rail Box Car Co.--Pooling, 347 I.C.C. 862 (1974). Trailer Train Co., et al.--Pooling--Car Service, 5 I.C.C.2d 552 (1989).

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