Railcar purchasing is in a slump through 2010
Analyst sees demand pickup in 2011-2013
By Staff -- Purchasing, 1/14/2009 6:43:00 PM
Railcar loadings dropped by 3% in 2008, according to the Association of American Railroads, which has led economist Kenneth Kremar to write that “rail traffic will weaken appreciably over the near term, which is bad news for freight-car builders.”
The IHS Global Insight analyst in Washington tells clients that “freight car demand will remain in the doldrums until the economy establishes some forward momentum—most likely as we move through 2010.” Freight car deliveries of 60,444 units last year were a decline of 4.3% from 2007. Kremar’s forecast suggests deliveries tumbling 38.8% in 2009 to 37,013 units and falling another 8.6% in 2010 to 33,831 units.
More than 40% of the North American fleet has been in service for more than 25 years. So, says Kremar, rail and private-fleet efforts to scrap and replace older and smaller obsolete cars will provide future lift in freight car demand. That’s why he forecasts freight car deliveries of 53,070 units in 2011, 67,053 units in 2012 and 71,163 units in 2013.
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