Lease vs. Purchase

Many shippers are faced with the decision on whether or not to purchase railcars or lease their fleet and the right answer depends heavily on the position and goal of the company.

Purchase

• Balance Sheet oriented - Company wants to build equity on the balance sheet.

• Rail dedicated logistics team - Company has a knowledge of shipping rules and regulations and is willing to manage all cost associated with owning and managing rail assets.

• Strong Capital Position - Company has a dedicated amount of capital set aside to purchase railcars. Depending on car type needed this can be costly.

Leasing

• Focused Areas other than Rail Assets - Many companies prefer to invest capital into growing their core business instead of building their logistics fleet.

• Need for reduced Risk - Because in general leasing rail equipment has less overall risk and commitment vs. owning.

• Management of Equipment - Managing the costs associated with maintaining rail equipment can be burdensome and time consuming. There are lease options available to help lessen these concerns.