Car Deliveries up, still railcar shortage

[Anonymous]

From Progressive Railroading

EPA report: Rail-car deliveries to reach 46,000 units in 2005, surpass 58,000 units by 2009

During the first quarter, North American rail-car orders rose about 50 percent to 18,000, but car deliveries totaled 10,000 units, swelling car builders' backlogs from 34,000 units at the end of fourth-quarter 2003 to 42,200 units at March's end, according to Economic Planning Associates Inc.'s (EPA) recently released "Outlook for Rail Cars" quarterly report.

"Interest rates are low, inflation is moderate and recent revisions to the tax code are conducive to [increasing] consumer spending and will provide greater incentives for business purchases of capital equipment," the report states.

Because they placed fewer car orders the past three years, fleet owners' equipment is aging, which is increasing pressure to replace reefers, and box, insulated, steel coal and certain tank cars, EPA officials believe.

"[But] even with large backlogs and anticipated further growth in orders for a variety of rail cars, we believe that shortages of domestic castings will constrain assemblies both this year and into the first half of next year," the report states.

EPA projects car orders to total 42,600 units by year end — despite higher steel costs that are helping elevate car prices — and deliveries to total 46,000 in 2005.

Between 2006 and 2009, demand will increase for centerbeams, high-cube covered hoppers, intermodal equipment, and tank and coal cars, and pressure will mount to replace mid-sized and small-cube covered hoppers, and steel coal, box and multi-level flat cars. Based on those factors, car deliveries will rise to 58,400 units by 2009, EPA officials believe.

[Anonymous]

Yup, here's another good article I was reading on the BLE site

http://www.ble.org/pr/news/headline.asp?id=10829

[CShaveRR]

And, Union Tank Car Company is building a new manufacturing plant in Alexandria, Louisiana, which is to supplement--not replace--its existing plants.

It's nice to be riding the wave, but they have never been able to level out the boom-and-bust cycle of freight car production. My guess is that ten or twelve years from now we'll be in another valley...and when it comes time to cut back, if these new plants are more modern and more efficient (I wouldn't dare touch the sore subject of cheap labor!), it'll be the old facilities that have seemingly been around forever that go by the wayside.

[MP173]

re: Union Tank Car new plant in Louisiana...can you point me to where it is stated it is supplementing, not replacing production?

Was it in a press release? Had heard rumors of the new plant, but also had heard that East Chicago might close.

[CShaveRR]

http://www.utu.org/worksite/detail_news.cfm?ArticleID=14779

I hope the link works...this news item, released before the precise location was announced, used the word "consolidate" as what the new plant would not do.

I've seen a lot of cars that have been built at East Chicago so far this year. But, as luck would have it, I drove by the western edge of the East Chicago plant today, and it didn't look as busy as I've seen it in the past.

[MP173]

The plant is pretty busy, producing 30 cars/week with scheduled production increase to 40/week later this year.

Not much is done on the west side of the plant.

They have had a few problems lately with steel deliveries, had to shut down for nearly a week due to lack of steel.