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3/23/2010



Rail News: Rail Industry Trends

Lessors note more freight-car usage since 2009's end, Longbow Research says


In February, the average rail-car utilization rate reached 85 percent, up slightly from 82 percent in December and 83 percent in November, according to Longbow Research’s latest survey of 15 to 20 rail-car lessors. The survey reflects higher deliveries of covered hoppers and tank cars.

Inquiries are up since 2009’s end and more car orders are expected soon, according to some respondents.

“Plans to purchase used rail cars were higher along with some increase in lease rates for large covered hoppers for grain service, ethanol-related cars and other types of tank cars,” Longbow Research officials said in a survey summary. “We now expect demand to begin increasing until mid-2010 versus our prior expectation for a late 2010 recovery.”

Scrapping activity is tightening rail-car supply, prompting Longbow Research to advance its prediction of an industry recovery.


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