The IPD Boxcar Boom
In the 1970s, a surge of brightly coloured boxcars swept across North American railroads, marking the rise of shortline fever. This movement was spurred by changes in Association of American Railroads (AAR) car service rules, which incentivized the use of boxcars leased from shortline railroads. At a time when larger railroads were heavily investing in specialized freight cars like covered hoppers and intermodal flatcars, their fleets of aging general-purpose boxcars (XM-class) faced a growing shortfall. Opportunistic financiers and shortlines stepped in to fill the gap, ushering in the era of Incentive Per Diem (IPD) boxcars.
The Mechanics of IPD Boxcars
IPD boxcars allowed shortline railroads to charge a per diem—a daily fee—until their cars were returned by larger railroads, encouraging swift turnaround and high utilization. These boxcars, which were primarily 50-foot, 70-ton rib-sided designs, featured either 10-foot sliding or plug doors, or double sliding doors optimized for mechanical loading. This design balance made them versatile for various commodities and industrial customers. Built by manufacturers like ACF Industries, Pullman-Standard, Berwick Forge & Fabricating, Golden Tye, Paccar, and Thrall, these boxcars became ubiquitous throughout the U.S. and Canada.
A Financial Windfall for Shortlines
Financiers such as the National Railroad Utilization Corporation (NRUC) and SSI Corporation saw an opportunity to lease boxcars to the nation’s 300 shortlines. Many of these shortlines had minimal or no boxcar fleets of their own but operated on lines with sufficient outbound traffic to justify the expense. For these railroads, leasing IPD boxcars provided much-needed revenue and operational flexibility. A newly built IPD boxcar, costing around $32,000, could generate over $7,000 annually in per diem fees. The majority of this revenue flowed back to the lessors, while shortlines retained a smaller cut (12–20%).
Eye-catching colours and logos adorned these boxcars to promote the lessee shortlines, while the standardization of 50-foot boxcars with plug or sliding doors made them attractive to shippers. Fleets ranged from the modest 20 cars leased by Lenawee County Railroad to the 2,000 baby-blue boxcars of St. Lawrence Railroad.
The Loophole and the Boom
The AAR’s rules exempted IPD boxcars from traditional car service requirements, allowing these “free runners” to roam the national network without needing to return home when empty. This loophole meant IPD boxcars could remain in service for longer periods, maximizing profitability. Major Class I railroads, such as Conrail, grew frustrated as they were forced to pay per diem fees for boxcars they often didn’t need. In response, some began bypassing the intended system by sending empty IPD cars back to shortlines, regardless of pre-existing traffic arrangements.
Between 1974 and 1981, over 60,000 new boxcars were built under IPD arrangements. Shortline fleets exploded in size, with cars built to similar specifications to maximize utilization. Meanwhile, Railbox, a subsidiary of Trailer Train Corporation, was founded by Class I railroads in 1974 to counteract the IPD trend. Railbox introduced its own fleet of 50-foot yellow boxcars emblazoned with the slogan “Next Load, Any Road,” which operated on similar principles but avoided per diem fees because Railbox itself was not classified as a railroad.
The Decline and Legacy
The boom eventually came to an end in the early 1980s, driven by a combination of factors. Economic recession, trucking deregulation under the Motor Carrier Act of 1980, and changes to AAR rules regarding car service and per diem charges all contributed. By the mid-1980s, hundreds of IPD boxcars were stranded on shortline railroads, unable to find enough outbound traffic to remain profitable. With mounting storage costs and declining returns, many of these cars were sold off or scrapped.
The May 1980 issue of Railfan magazine highlighted the challenges emerging for shortlines:
“With the downturn in the economy, those flashy IPD short-line boxcars are [coming home]. This is no major problem for lines with enough on-line business to get their cars loaded and outbound again, but this means the boxcars are beginning to pile up at home.”
The IPD boxcar boom remains a unique chapter in railroad history, illustrating how changes in regulations can spur innovation—and excess. Today, the legacy of IPD cars endures in the lessons learned about fleet management, regional railroads, and the interplay between market forces and regulation.
★
| Reporting Mark | Owner | Nos. | Type | Model | |
|---|---|---|---|---|---|
| AA | Ann Arbor Railroad System | 5000-5099 (100) | Constructora Nacional de Carros 5,000 cu.ft | – | |
| AA | Ann Arbor Railroad System | 5100-5199 (100) | PS 5,344 cu.ft | Fox Valley ★ | |
| ADN | Ashley, Drew & Northern | 7600-7649 (50) | 5,077 cu.ft. | – | |
| ADN | Ashley, Drew & Northern | 7700-7799 (100) | SIECO 5,077 cu.ft. | Athern | |
| ADN | Ashley, Drew & Northern | 8000-8199 (200) | 50 Foot, ACF | Atlas | |
| ADN | Ashley, Drew & Northern | 9000-9349 (350) | PC&F 5,528 cu.ft. | – | |
| ADN | Ashley, Drew & Northern | 9400-9699 (300) | SIECO 5,486 cu.ft. | – | |
| ADN | Ashley, Drew & Northern | 9700-9899 (200) | PC&F 5,528 cu.ft. | – | |
| AHW | Ahnapee & Western | 4000-4099 (100) | FMC | Fox Valley ★ | |
| ALM | Arkansas & Louisiana Missouri | 1150-1249 (100) | ACF 6,596 cu.ft. | – | |
| ALM | Arkansas & Louisiana Missouri | 1500-1599 (100) | PS 5300 | – | |
| ALM | Arkansas & Louisiana Missouri | 4100-4119 (20) | – | ||
| AM | Arkansas & Missouri | 500-524 (25) | – | ||
| AM | Arkansas & Missouri | 1001-1075 (74) | FMC 5,503 cu.ft. | – | |
| AMR | Arcata & Mad River Railroad | 1000-1099 (100) | ACF 5,300 cu.ft. | – | |
| AN | Apalachicola Northern | 5000-5199 (200) | ACF 5,300 cu.ft. | Atlas | |
| AN | Apalachicola Northern | 5200-5399 (200) | – | ||
| AN | Apalachicola Northern | 5400-5599 (200) | FMC 5,347 cu.ft. | Athearn | |
| AN | Apalachicola Northern | 6000-6099 (100) | SIECO 5,277 cu.ft. | – | |
| AN | Apalachicola Northern | 7000-7084 (85) | SIECO – acquired in early 1994. | – | |
| ANR | Angelina & Neches River Railroad | 300-399 (100) | PC&F 5,528 cu.ft. | – | |
| ANR | Angelina & Neches River Railroad | 600-649 (50) | FMC 6,589 cu. ft. | – | |
| APA | The Apache Railway | 1700-1799 (100) | FMC Gunderson, Hi-Cube 6,241 cu. ft. | LBF Company | |
| APA | The Apache Railway | 1800-1949 (150) | FMC 5,077 cu.ft. | – | |
| AR | Aberdeen and Rockfish | 1025-1048 (24) | SIECO 5,077 cu.ft. | – | |
| AR | Aberdeen and Rockfish | 1500-1599 (100) | SIECO 5,277 cu.ft. | – | |
| ASAB | Atlanta & St. Andrews Bay Railroad | 7000-7089 (90) | FMC 5,077 cu.ft. | Atlas | |
| ASAB | Atlanta & St. Andrews Bay Railroad | 7090-7099 (10) | FMC 5,077 cu.ft. | Atlas | |
| ASAB | Atlanta & St. Andrews Bay Railroad | 7100-7149 (50) | ACF 5,300 cu. ft. | Atlas | |
| ASAB | Atlanta & St. Andrews Bay Railroad | 7150-7199 (50) | FMC, 5,347 cu. ft. | Fox Valley | |
| ASAB | Atlanta & St. Andrews Bay Railroad | 7200-7299 (100) | FMC, 5,347 cu. ft. | – | |
| ASAB | Atlanta & St. Andrews Bay Railroad | 8000-8099 (100) | ACF 6,600 cu. ft. | – | |
| ASAB | Atlanta & St. Andrews Bay Railroad | 8100-8201 (102) | ACF 6,600 cu. ft. | – | |
| ASAB | Atlanta & St. Andrews Bay Railroad | 266390-266422 (33) | Acquired from Conrail in 1974 ex Penn Central | – | |
| ATW | Atlantic & Western Railroad | 1000-1024 (25) | CNCF | – | |
| ATW | Atlantic & Western Railroad | 16000-16024 (25) | US Rly | ||
| ATW | Atlantic & Western Railroad | 64000-64099 (100) | US Rly | ||
| BCH | BC Hydro Railway | 620-669 (50) | PC&F 5,504 cu. ft. | ||
| BH | Bath & Hammondsport | 25101-25150 (50) | FMC | ||
| BMS | Berlin Mills | 201-500 (300) | PC&F 5,317 cu. ft. | RCP | |
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| CLC | |||||
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| CLC | |||||
| CLP | Clarendon and Pittsford | 3001-3060 (60) | FMC 5,077 cu.ft. | Atlas | |
| CLP | Clarendon and Pittsford | 3061-3160 (100) | ACF 5,317 cu.ft. | Atlas | |
| CLP | Clarendon and Pittsford | 3161-3260 (100) | PS 5,344 cu.ft. | ||
| COP | City of Prineville | 7001-7200 (200) | FMC 5,077 cu.ft. | Atlas? | |
| COP | City of Prineville | 7201-7400 (200) | FMC 5,077 cu.ft. | Atlas? | |
| CLPT | |||||
| MB | Merdian and Bigbee | 4000-4099 (100) | FMC 5,347 cu.ft. | ||
| MB | Merdian and Bigbee | 5000-5299 (300) | United American 5,277 cu.ft. | ||
| NSL | Norwood & St Lawrence Railroad | 100000-100099 (100) | SIECO 5,077 cu.ft. | 100028, 100334 | Athearn |
| NSL | Norwood & St Lawrence Railroad | 100300-100345 (46) | PS 5,077 cu.ft. | – | |
| NSL | Norwood & St Lawrence Railroad | 100346-100448 (103) | Berwick 5,077 cu.ft. | – | |
| NSL | Norwood & St Lawrence Railroad | 100500-100599 (100) | SIECO 5,077 cu.ft. | – | |
| NSL | Norwood & St Lawrence Railroad | 100700-100896 (197) | Berwick 5,037 cu.ft. | – | |
| NSL | Norwood & St Lawrence Railroad | 100897-100996 (100) | Berwick 5,037 cu.ft. | – | |
| NSL | Norwood & St Lawrence Railroad | 102200-102299 (100) | Berwick 5,037 cu.ft. | ||
| NSL | Norwood & St Lawrence Railroad | 150400-150549 (150) | Berwick 5,277 cu.ft. | ||
| NSL | Norwood & St Lawrence Railroad | 155260-155409 (150) | SIECO 5,277 cu.ft. | ||
| NSL | Norwood & St Lawrence Railroad | 155410-155609 (200) | SIECO 5,277 cu.ft. | ||
| NSRC | North Stratford Railroad | 400-499 | Pullman-Standard 3,746 cu.ft. | – | |
| O | |||||
| P | |||||
| Q | |||||
| R | |||||
| SAN | Sandersville | 10000-10099 (100) | Pullman- Standard 5,344 cu.ft. | Roundhouse | |
| SAN | Sandersville | 13000-13099 (100) | Pullman- Standard 5,344 cu.ft. | Fox Valley | |
| SBVR | South Branch Valley | 2001-2050 (50) | Pullman- Standard 5,344 cu.ft. | Fox Valley | |
| SERA | Sierra | 3000-3009 (10) | FMC 5,077 cu.ft. | Atlas | |
| SERA | Sierra | 4000-4049 (50) | FMC 5,077 cu.ft. | Roundhouse | |
| SERA | Sierra | 5000-5049 (5)) | FMC 5,077 cu.ft. | Athearn | |
| SJL | St Johnsbury & Lamoille County | 8000-8049 (50) | Pullman- Standard 5,077 cu.ft. | – | |
| SM | St. Mary’s | 2001-2155 (55) | ACF 5,317 cu.ft. | – | |
| SN | |||||
| SNCT | |||||
| SRN | |||||
| SSAM | |||||
| SSDK | |||||
| STMA | |||||
| T | |||||
| UO | Union Railroad of Oregon | 1500-1549 (50) | FMC 5,077 cu.ft. | 1508, 1528 | |
| VTR | Vermont Railway | 3501-3550 (50) | FMC 5,077 cu.ft. | ||
| VTR | Vermont Railway | 4000-4099 (100) | FMC 5,077 cu.ft. | ||
| VTR | Vermont Railway | 4100-4139 (40) | FMC 5,077 cu.ft. | ||
| VTR | Vermont Railway | 11001-11300 (300) | PS 5,344 cu. ft. | ||
| VTR | Vermont Railway | 12001-12200 (200) | FMC 5,347 cu. ft. | Fox Valley | |
| VTR | Vermont Railway | 13001-13250 (250) | PS 5,344 cu. ft. |
- Delta Valley & Southern Railway Co. (DVS)
- East Camden & Highland (EACH)
- East St Louis Junction (ESLJ) [7731]
- Green Mountain (GMRC)
- Hartford & Slocomb (HS)
- Lake Erie, Franklin & Clarion (LEF)
- Lamoille Valley (LVRC) – [4089, 4099, 5052, 5093, 5105, 5215, 5366]
- Lenawee County (LCRC) – 20
- Little Rock & Western (LRWN)
- Louisville, New Albany & Corydon (LNAC) 40 foot –
- McCloud (MCR)
- Minnesota Dakota and Western (MDW) [8086-8087 blt 12/79]
- Mississippi Export (MSE)
- Oregon, Pacific and Eastern (OPE)
- Port Huron & Detroit (PHD)
- Providence & Worcester (PW) [60010, 60313, 60527, 60551 blt 10/78]
- Sabine River & Northern (SRN)
- Savannah State Docks (SSDK)
- Sierra Railroad (SERA)
- St. Mary’s (SM)
- Vermont (VR) [11280, 12167]
- Wabash Valley (WVRC)