Outlook 2018: Nate Bachman, Georgetown Rail Equipment Inc. (GREX)

Contractors and suppliers saw a solid improvement in 2017 over 2016. For GREX, there was growth in nearly every one of the company’s product categories. GREX is expecting even better results in 2018.

Although the 2018 capital plans for our railroad customers are currently being finalized, recent discussions at Railway Interchange and the Railway Tie Association conference suggest that capital budgets will be flat to slightly down from 2017 levels. We see our customers not only focused on improving operating ratios, but also committed to the projects and maintenance that promote increased carload volumes, safety and efficiency.

As seen with the response to hurricanes Harvey and Irma, the ability of railroads to restore service in devastating storms is better than ever.

The company continues to work on new product releases that will complement the existing product suite. Aurora Xiv™ was launched at Railway Interchange and will expand to working on Class Is, regionals, short lines and commuter railroads alike. GREX’s DumpTrain for Curves®, released this year, also positively impacted the industry by allowing railroads to unload ballast material in any track alignment configuration.

As capital spending and maintenance programs become increasingly targeted, data-driven decision making becomes critical in the planning process. GREX’s inspection technology arms our customers with the most comprehensive tie and ballast data, maximizing asset life and safety.

GREX is watching several key legislative items that could impact 2018: the outcome of tax reform, which is anticipated to have a broad impact on business; filling Surface Transportation Board vacancies; confirming the new federal railroad administrator; impacts associated with changes to the NAFTA agreement; and extending the Section 45G short-line tax credit.

While key commodities, such as coal, have decreased from their historical highs, the resiliency of the railroads to broaden business allows contractors and suppliers to effectively support new economic initiatives.