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RAIL EMPLOYMENT



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2/4/2011



Rail News: Rail Industry Trends

Rail-car deliveries to reach 27,000 units in 2011, EPA says


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Led by strength in demand for covered hoppers and intermodal platforms, rail-car orders in the fourth quarter reached 10,853 units — a level not attained since second-quarter 2008, according to Economic Planning Associates Inc.’s (EPA) latest “Railcar Overview” report.

Although car assemblies jumped from 3,706 units in the third quarter to 7,333 units in the fourth quarter, year-end backlogs stood at 22,658 cars and platforms, the highest level since first-quarter 2009.

“While demand for certain car types, most notably coal cars and mill gons, were relatively quiet in the fourth quarter, we anticipate improving orders for these car types this year and next,” EPA officials said in the report. “As our economy continues to expand, we anticipate higher levels of electricity generation and coal consumption. With inventories much leaner than in 2009 and the first half of 2010, we expect stronger movements of coal to the power generators this year and next.”

Interest in mill gons should increase during the next two years as demand for steel products continues to reflect manufacturing strength, EPA predicts.

The company also expects rail traffic to keep increasing. After a 7.3 percent gain last year, commodity haulings should increase 2.5 percent this year, the report states. Momentum this year will carry over into 2012, when carloads will increase 2 percent; from 2013 through 2016, annual carloadings then will moderate from 1.6 percent to 1.3 percent, EPA projects.

Based on beginning-year backlogs and the anticipation of continued rail traffic gains, the company expects 2011 rail-car deliveries to total 27,000 units, which would mean a 63.4 percent increase compared with 2010’s level.

“Continued growth in haulings, combined with significant replacement pressures, will bring 2012 deliveries to the level of 33,500 cars and platforms,” EPA officials said. “After 2012, we look for an acceleration in rail-car demand, which will take deliveries from 42,800 units in 2013 to 58,000 units in 2016.”


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