Report: Rail-car demand 'weakened significantly' in Q1

Rail-car demand "weakened significantly" in this year's first quarter and backlogs dropped to only 95,038 cars, according to Economic Planning Associates Inc.'s June outlook report.

The smaller backlog still represents 5.6 quarters of assemblies at current rates, the report stated.

Due to the weak demand for coal cars and lower orders and backlogs for other types of cars, the firm eased its 2016 deliveries estimate to 60,300 cars and the 2017 projection to 47,300 units.

"After 44,000 cars are assembled in 2018, deliveries will rise gradually to the annual level of 54,500 cars in 2021," the report stated.

The report noted that railroads will "shoulder a heavy commodities burden" this year. Coal and petroleum loadings are down and will be slow to recover. In addition, intermodal traffic has been weak.

Coal car demand is "nonexistent," the report's authors wrote. Also, the current energy market is "sluggish at best, and we noted a slowing in orders and assemblies of tank cars," they said.

"As a result, we are lowering our 2016 tank-car deliveries estimate from 30,000 to 20,000," they added.