TwitterFacebookRSS Print Friendly and PDF

-
GE impressions

Rail News Leader - Progressive Railroading

become a membernewsletters signup


<< Rail Magazine Articles Home

December 2012



Rail Industry Trends Article
Rail outlook 2013; reading the rail-car order barometer (Pat Foran, Context, December 2012)



Rail Industry Trends

— by Pat Foran, Editor

The Sound Of Slow-Growth Music, Still

As post-election talk fades and rail strategists erase a bullet point or two from their "near-term uncertainties" lists, the tone of their 2013 outlook sentiments sounds very much like last year's. Of course, last year's more or less echoed the previous year's, and the couple before that. It's the sound of slow-growth music, and it'll fill the air for the foreseeable future, rail leaders told us in interviews and email conversations as we put together our annual outlook coverage.

For the most part, the market nuances they shared were familiar. Freight folks expect crude oil and domestic intermodal to help lead the slow-growth way in 2013, as Managing Editor Jeff Stagl reports. And while execs at many U.S. transit agencies feel a bit better about what they believe is more stable federal funding, they're as concerned as ever about the availability of state and local funding, Assistant Editor Julie Sneider notes. Of course, all expectations are asterisked by the requisite lingering uncertainty about the economy, a bullet point that remains on everybody's "near-term" lists.

What about the longer term? As ever, it depends on how you define both "longer" and "term." But the rail-as-a-growth-industry story, in both freight- and passenger-rail contexts, very much remains a good-news story. As Union Pacific Railroad President and Chief Executive Officer Jack Koraleski put it in an email to Stagl: "In my 40-year career, the future has never been more promising for Union Pacific than it is today."

The outlook beyond 2013 for U.S. transits, if it's appropriate to view them collectively, also is bright. As American Public Transportation Association President and CEO Michael Melaniphy told Sneider: "As we look at the economy coming back stronger — and our agencies are able to stabilize their systems and not implement cuts in services or fare increases — we think the role that transit will have [in the recovery] is going to be even more significant."

It's a significance that'll continue to be measured in inches rather than miles, in chorales with cautiously optimistic flourishes rather than overtures in overdrive. As one exec put it to me (and I paraphrase): About all you can say is that when 2013's over, we'll be that much closer to post-gradual growth.

It's hardly a satisfying sum up, particularly for quarter-to-quarter progress trackers or the year-over-year comparison crowd, but it's a tune we're all getting used to whistling. Whatever you'll be whistling, or listening to or for, here's to a tuneful 2013.

Reading The Rail-Car Order Barometer

Rail-car orders (and projections for same) generally offer clues about the rail industry's near-term health, if not prospects. Witness a couple of prognosticators' recent projections and why they've made them.

After projecting 58,500 deliveries for 2012, Rail Theory Forecasts L.L.C. (RTF) expected as of November to see a steep drop in deliveries in 2013 to about 42,000 cars — unless the fourth quarter picks up, big time, writes RTF President and Progressive Railroading columnist Toby Kolstad in his column this month (see page 15). Aside from orders related to the energy boom (small covered hoppers for industrial sand and crude oil tank cars), orders for most car types really haven't recovered from the last recession's lows. "One could say that we are still in the early stages of economic recovery," Kolstad wrote.

Economic Planning Associates Inc.'s (EPA) October report featured similar sentiments and a slightly rosier outlook.

"The U.S. roads reported that both coal and agriculture were extremely weak markets during the third quarter," according to EPA, which projects 48,800 deliveries in 2013. "And, we suspect that coal will continue to underperform in the short- and long-term horizons."

Nevertheless, EPA's tea leaves suggest better-than-slow growth on the car-order front after next year's trough. Over the longer haul, "worldwide nutritional needs and expanding exports" will drive the need for grain service cars and "long-neglected" segments such as equipment to haul waste, aggregates and limestone should show "signs of revival." But tank cars to haul "ever-increasing volumes of oil and petroleum products" is the "most dynamic element" driving demand, EPA says.

Accordingly, the firm projects rail-car deliveries to rebound to 60,300 cars in 2014, and reach an average of 66,000 to 67,000 per year through 2017.



More articles



Progressive Railroading editorial staff.

1

RAIL EMPLOYMENT


NEWSLETTERS SIGNUP

Stay updated on news, articles and information for the rail industry





Share