This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
November 2023
Compiled by Julie Sneider, Senior Editor
Rail-car repair services are in the middle of a high-demand cycle that directly favors those committed to customer value and growth, AITX officials said in an email.
“We’re seeing freight shippers want more focused partnerships. They want more than just availability and uptime, but also predictability and planning to stay one-step ahead, regardless of the cycle,” they said.
That requires more integrated solutions, as in a full-service, flexible service offering across fleet management, leasing and repairs, directly reinforced through product scale, capabilities and industry expertise, AITX officials believe.
Heightened demand is driven by new business growth and greater regulatory compliance. As new rail-car projects come online, more cars are prepped to enter the market to offset retiring ones and to support growth.
As tank cars near required 10-year inspection dates, there’s an influx of regulatory tank qualification requirements that will continue into 2025, with a focus on tank-car lining work to mitigate against potential interior corrosion, company officials said.
In response to those trends, AITX analyzed current volumes and invested in an expansion. The second phase of its expanded facility in Brookhaven, Mississippi, is primed for tank qualification business, AITX officials said.
With two new M1003 facilities, the company has a more regional presence: the AITX Clinton facility in southern Indiana on a CSX line and the AITX Milton facility in central Pennsylvania on a Norfolk Southern Railway line.
The company works with customers on proactive car-flow planning so that their needs are prioritized, repair shops are scheduled and timelines are transparently clear, AITX officials said. As part of the planning, the company works with parts vendors on material scheduling to help mitigate potential inventory delays to turn times.
At Genesee & Wyoming’s Railcare Inc., repair business has been steady for the past 18 months. There have been consistent and elevated levels of bad order cars arriving at the Hamilton, Ontario, shop for medium- to heavy-damage repairs, Railcare officials said.
Established in 2002 and directly served by CN and Canadian Pacific Kansas City, Railcare is a full-service freight-car repair shop that provides mobile and onsite car repair and inspection, cleaning, welding and fabrication, and dismantling and scrapping services for shippers in Canada and the United States.
The demand for Railcare’s services has diversified across most car types and customers, company officials said.
"General confidence in the economy, coupled with the economics and delivery of securing new rolling stock, seem to have most car owners willing to take on repair spend," they said. "Expecting this trend to continue into 2024, [we] will focus on strategic purchasing to minimize the impact that the parts supply-chain delays can have on shop throughput and cycle time."
Also in 2024, Railcare leaders — in facing the labor shortage that's been affecting businesses across North America — plan to emphasize talent recruitment and retention to ensure the company has enough trained and motivated personnel to continue exceeding customer expectations.
Greenbrier Rail Services (GRS) is a rail-car maintenance services provider with a nationwide network of full-service car repair centers.
GRS can service all rail-car types, company officials said. Its services include certified tank-car cleaning, repairs, retrofits and recertifications; auto rack repairs and recertifications; lease returns; routine maintenance; and program work.
The company also can handle wreck and mobile repairs, and custom engineered projects.
Within Northern Plains Rail Services' upper Midwest geographic area, shop car flow has been "relatively steady but could be stronger," according to Ted Jakubiak, the company's senior sales and marketing representative.
At the same time, mobile car repairs have significantly increased in volume this year, he added.
"To remain competitive, third-party providers must offer more servicing options to not only meet demand but deliver on efficient turnaround times," said Jakubiak. "We've also noticed a decrease in requests for traditional program work and/or lease return activity. This may be a direct result of a busy freight-car usage market."
Northern Plains Rail leaders expect the mobile-car repair market to remain strong next year. They anticipate more mobile and shop repair business due to recently adding M1002 tank-car certification to the company’s service capabilities.
"In 2024, … the market demand will challenge us to not only increase our servicing capabilities but also seek expansion within our strategic regional geography," said Jakubiak. "In doing so, we’ll work toward effectively meeting and improving expected customer needs for faster repair response and turnaround times."
Cars used to move agriculture products and aggregates represent a significant part of Northern Plains’ repair business.
"Pre- and post-harvest cycles directly impact car repair volumes, so we tend to experience high demand when cars are not as actively in service," said Jakubiak. "We do anticipate that the trend toward expansion of the biofuels industry will have a positive impact on our car repair business."
Business in the North American rail-car segment has been good for Omaha Track's TM Track Machines business, which provides rail-car and locomotive maintenance services, according to Shane Stalford, the company's chief operating officer.
"We are busy, our customers are investing in their existing fleets and also purchasing new equipment — these are all good signs of healthy railroads and healthy service providers," Stalford said.
TM Track Machines can house over 30 rail cars at its facility in Parsons, Kansas, which enables its experienced mechanics and electricians to work in a protected environment.
TM Track Machines modifies, repairs and rebuilds rail cars for its parent company Omaha Track, as well as for Union Pacific Railroad and Amtrak. Last year, TM Track repaired or modified nearly 300 cars for UP alone.
"We have rebuilt their side dump fleet, modified flat cars to haul specialized equipment, and fabricated and installed blast doors on their rail trains," said Stalford. "We also conduct routine maintenance on their fleet. This year we began working on one of UP’s largest gang trains."
TM Track officials expect this year's level of steady work to continue into 2024.
"We have built good relationships with our customers and are able to be responsive and supportive when they adjust their inventory by investing in new equipment and/or retiring others," Stalford said. "We are part of that conversation. The type of equipment may vary, but we will always be there to meet their needs."
Customers' recent investments in new equipment means TM Track can anticipate more general car repairs in addition to usual maintenance-of-way work in 2024, he added.
"We are also looking into locomotive work as customers strive to modernize and upgrade existing engines to meet U.S. Environmental Protection Agency standards," Stalford said. "TM Track can support customers' green initiatives by retrofitting locomotives to be compliant."
Email comments or questions to julie.sneider@tradepress.com.
Related Topics: