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<< Rail News Home: Mechanical

7/14/2006    Freight-Car Market

Rail News: Mechanical

Burgeoning coal and intermodal traffic bodes well for rail-car demand, FTR says

Driven by increasing coal and intermodal traffic, rail-car demand will remain at historically high levels the next few years, according to transportation research firm FTR Associates.

Railroads’ total ton miles will rise 2.1 percent in 2006, 2.6 percent in 2007 and 2.1 percent in 2008, the company predicts. Although housing material and chemical traffic has slowed, coal, intermodal and farm product carloads have increased.

“The slowing in demand from non-core segments should allow the railroads to start making much needed improvements in productivity and turn-around times,” said FTR President Eric Starks in a prepared statement. “Average speeds are already showing improvement.”

Because rail equipment capacity is constrained, car orders are outpacing deliveries. And as backlogs continue to mount, car builders will be pressured to increase production levels, FTR said.

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