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Rail News: Rail Industry Trends

Freight-car deliveries to total 16,000 in 2010, 21,000 in 2011, EPA says


Rail-car builders had a difficult year in 2009 as rail traffic declined for the third-straight year, but by the largest percentage since 2007 — 16.1 percent, according to Economic Planning Associates Inc.’s (EPA) “Railcar Overview” report for January. Car assemblies totaling 21,682 “far outpaced the dismal level” of car orders totaling 8,336 in 2010, the report states.

Car builders will continue to face strong headwinds this year because rail traffic levels remain low and there’s still a substantial excess supply of rolling stock in the rail industry.

“Nonetheless, we expect good gains in both commodity and intermodal traffic this year and next, which could stimulate new equipment demand later this year and lead to a pick-up in rail-car demand in 2011,” EPA officials said in the report.

The company projects commodity carloadings to increase 2.7 percent this year and 2.8 percent in 2011. From 2012 through 2015, annual carloading growth then will moderate from 1.7 percent to 1.3 percent, EPA said. The firm also expects a 4.2 percent rebound in intermodal shipments followed by a 4.6 percent hike in 2011 and 5.3 percent rise in 2012. From 2013 through 2015, intermodal traffic gains will range from 4 percent to 5 percent, EPA estimates.

“Based on opening year backlogs and the anticipation of some modest orders for covered hoppers, tank cars and coal cars, we expect assemblies of 16,000 units this year,” EPA officials said. “Even with continued improvements in economic activities, the over-supply of rail cars will dampen the rebound in assemblies next year. In 2011, we look for deliveries of only 21,000 cars.”

The “extremely low levels” of deliveries this year and next will “intensify the pressure” to replace aged equipment in various fleets over the long term, the report states.

“After three dismal years, we look for rail-car deliveries to advance moderately to 34,800 in 2012, and then expand annually to the level of almost 60,000 in 2015,” EPA officials said.

Contact Progressive Railroading editorial staff.

More News from 2/1/2010