Freight-car demand remains flat, report says

Economic Planning Associates Inc.'s (EPA) latest freight rail-car forecast for total deliveries in 2017 remains at 42,500 units due to the strength in box cars, hi-cube covered hoppers and mid-sized hoppers.

"However, weaknesses in tank cars, coal cars, flat cars and mill gondolas will serve to keep 2018 assemblies flat at 42,500 cars," stated the report, which was released last week.

Due to a slowdown of assemblies during first-quarter 2017, the backlog of 60,500 cars as of March 30 still represents some six quarters of production at the current rate of assembly, the report stated.

"Unfortunately, there are still underutilized cars in the various fleets which will keep rail-car deliveries moderate this year and next," EPA officials wrote. "However, we expect stronger economic activities and an easing in the regulatory environment to induce a pickup in rail-car orders in 2018, leading to the next up-cycle in rail-car demand beginning in 2019."

Longer term, EPA estimates that rail-car deliveries will increase from 47,300 units in 2019 to 59,500 units in 2022.