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Rail News: Rail Industry Trends

Updates from J.B. Hunt Transport Services, Trinity Industries, American Railcar Industries, The Andersons and Wabtec/Vapor Rail


• J.B. Hunt Transport Services Inc. (JBHT) and Norfolk Southern Corp. (NS) recently reached a multi-year agreement to develop a new intermodal transportation contract to accelerate the conversion of traditional truck traffic to truckload-competitive intermodal transportation. “Given the enormous confidence we have in the Norfolk Southern’s ability to provide the best intermodal service in the eastern half of the U.S. and the obvious commitment NS has made by the significant investments in their corridor development, we are delighted to have the opportunity to elevate our joint services into the future,” said JBHT Chief Executive Officer Kirk Thompson in a prepared statement.”

• Trinity Industries Inc.’s Trinity Industries Leasing Co. (TILC) and Trinity Rail Leasing VII L.L.C. subsidiaries recently closed a $2.4 million rail-car leasing financing deal with a coupon of 6.657 percent, a transaction secured by rail cars and their operating leases. Funds received from the transaction will be used, in part, to pay down a portion of TILC’s rail-car leasing warehouse facility, and for future growth of TILC’s 49,470-car lease fleet. The financing “demonstrates the market’s positive perception of Trinity’s rail-car leasing business,” said Trinity Industries Senior Vice President and Chief Financial Officer William McWhirter in a prepared statement.

• American Railcar Industries Inc. (ARI) posted third-quarter revenue of $78.1 million and net earnings of $1.1 million — a 64 percent decline compared with revenue of $217.2 million and an 85.1 percent drop-off compared with net earnings during the same 2008 period. During the quarter, ARI shipped about 610 cars, down 71.2 percent compared with the 2,120 shipped during third-quarter 2008. “The weak rail-car market has and will continue to require us to evaluate our production levels at all manufacturing locations, and we plan to continue to adjust our workforce and production levels as needed,” said President and CEO James Cowan in a prepared statement.

• The Andersons Inc. recorded third-quarter net income $1.3 million, an 89.8 percent decline compared with the same 2008 period. Revenue of $601 million represented a 33.7 percent decline. In a prepared statement, Chairman and CEO Mike Anderson characterized the results as a “mix of areas of continued concern, and some positive developments. Most significantly, our Rail Group continued to be seriously impacted by the overall weak economy.” How seriously? The Rail Group posted an operating loss of $1.1 million, compared with $5.2 million earned during the same year-ago period. Gross profit from the leasing business was “significantly less due mainly to lower utilization rates and the corresponding increase in storage expense from idle assets.”

• Wabtec Corp.’s Vapor Rail unit received a $30 million contract to supply electric, sliding plug doors for 440 subway cars to be built by Hyundai Rotem for the Marmaray project in Istanbul, Turkey. The doors will be delivered beginning in 2010, with the order expected to be completed in 2012. Upon completion, the $4 billion Marmaray project, which includes construction of the world’s deepest tube tunnels, will connect the European and Asian sections of Istanbul. The plan includes a new, 8.5-mile section and the upgrading of 39 miles of suburban train lines.

Contact Progressive Railroading editorial staff.

More News from 11/6/2009