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Rail News Home Rail Industry Trends

6/3/2003



Rail News: Rail Industry Trends

Rail-car demand is rapidly rebounding, EPA says


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Although a more gradual rail-car-order turnaround was expected, a "rapid rebound" of orders in the first quarter and industry projections of higher-than-anticipated second-quarter orders have been "pleasant surprises," according to Economic Planning Associates Inc.'s (EPA) recently released "Outlook for Rail Cars" quarterly report.


First-quarter orders of 11,767 rose 35.1 percent compared with fourth-quarter 2002, and the first-quarter backlog of 24,055 cars reached "a level not seen since third-quarter 2000," said EPA, citing figures from Railway Supply Institute Inc.'s American Railway Car Institute Committee.


"Unlike the three previous upcycles — which were dominated by unusual strength in covered hoppers, intermodal flats or coal cars — original equipment manufacturers now find themselves with a diverse series of relatively healthy backlogs involving box cars, intermodal units, Class F flat cars and tank cars," EPA said.


However, the rapid demand turnaround is constraining car supply, which will limit 2003 deliveries to 31,000, EPA said. But supplies should ease in 2004, leading to 40,000 deliveries. In February, EPA had predicted 29,200 deliveries in 2003 and 38,500 deliveries in 2004.


Between 2005 and 2008, fleet owners will replace more steel coal, box and multi-level flat cars, and small-cube covered hoppers, and demand will increase for centerbeams, high-cube covered hoppers, and tank, intermodal and aluminum coal cars. Those factors will prompt car builders to deliver 48,500 units in 2005, and steadily increase deliveries to 60,800 units by 2008, EPA said.


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