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Rail News: Mechanical

Rail-car backlog reached record level in 3Q, EPA says


The rail-car market continued to surge in the third quarter, when orders for 42,900 cars and platforms far outpaced deliveries of 18,432 units. The result: a backlog at quarter's end of 124,437 cars and platforms — the highest level in history, according to Economic Planning Associates Inc.'s (EPA) latest "Railcar Overview" report.

"Most noteworthy of the third quarter expansion in orders was the widespread demand for a number of car types. Strong increases were recorded by all types of covered hoppers, intermodal equipment, Class F cars and tank cars," EPA officials said in the report. "Even the long-neglected box car segment expanded at a vigorous pace in the third quarter."

According to industry sources, the 3,510 box cars ordered primarily were for equipment destined for TTX Co., the report states.

"It now appears that after years of neglect, TTX is looking to upgrade its extremely aged general service cars," EPA officials said.

Demand for hi-cube covered hoppers turned in another impressive gain in the third quarter, with orders for 2,875 cars nearly matching the 2,950 cars ordered in the second quarter. Responding to an apparent shortage of grain-service cars, demand for mid-sized covered hoppers rose to "an impressive" 4,230 cars in the third quarter, the report states.

Demand for intermodal equipment continued to gain momentum, as well. After first-quarter orders of 2,207 platforms and second-quarter orders of 3,313 platforms, orders totaled 4,696 platforms in the third quarter.

"We expect further gains in demand for intermodal equipment as we proceed through 2014, 2015 and into the longer term," EPA officials said.

Meanwhile, tank-car demand continued to impress, they said. After 10,628 cars were ordered in the second quarter, third quarter orders amounted to 8,137.

"Based on the latest projections of oil production and impending legislative issues, we look for further growth in demand for oil service tank cars," EPA officials said.

For the full year, EPA officials now expect deliveries of 68,500 cars and platforms, followed by assemblies of 84,500 units in 2015. Longer term, deliveries are projected to moderate at significantly higher levels than the EPA's previous forecast.

In 2016, deliveries are forecasted at 76,800 cars, slipping only to 75,000 cars through 2019, the report states.

Contact Progressive Railroading editorial staff.

More News from 10/31/2014