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Rail News: Mechanical

Car deliveries still on pace to surpass 76,000 units by year's end, EPA says


During the year’s first half, rail-car orders totaled 54,200 units, a level that hasn’t been reached in decades, according to Economic Planning Associates Inc.’s (EPA) quarterly “Outlook for Rail Cars” report. Second-quarter orders totaled 18,200 units after first-quarter orders reached an unprecedented 36,000 units.

“Explosive growth in the corn-to-ethanol production process is stimulating specific investments in the movement of grain, ethanol and dry distiller grains,” the report states. “At the same time, steady economic expansion, high oil and natural gas prices, and increasing volumes of western coal moving east for electricity generation are stimulating investments in track, facilities and rolling stock to accommodate increased coal volumes.”

Second-quarter car assemblies rose by 1,000 units to 19,500 compared with the first quarter and on June 30, the backlog stood at 85,700 cars and platforms. Based on first-half assemblies and the high backlog, EPA predicts car deliveries will total 76,800 units by year’s end.

Demand will remain high for box, coal, tank and multi-level flat cars; mid-size, and high- and small-cube covered hoppers; centerbeams; and intermodal equipment, EPA said.

“Even as backlogs are worked off this year, we anticipate further growth in orders for a variety of equipment to accommodate deliveries of 75,800 units in 2007,” the report states.

After 2007, deliveries will drop slightly to 68,500 units in 2008 and continue to fall to 60,500 units by 2011, EPA said. However, deliveries will remain at historically high levels.