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On the heels of rebounding carload and intermodal traffic, rail-car demand is recovering, according to Economic Planning Associates Inc.’s (EPA) latest “Rail Car Outlook” report. Demand is strengthening as orders are being placed for “previously neglected” car types, such as small- and hi-cube covered hoppers, grain service hoppers, and intermodal platforms and cars.

“While deliveries have increased in both the second and third quarters, backlogs have jumped from 10,462 cars at the beginning of the year to 19,267 units at the end of September,” the report states. “The backlogs, as well as our anticipation of future growth in traffic, should keep short- and medium-term assemblies of assorted cars moving up gradually.”

Based on assemblies to date, current backlogs and car builders’ conservative approach to managing their backlogs, EPA expects car deliveries to total 13,500 units this year. In addition, the recent strengthening of demand for certain car types — such as the previously mentioned small-cube covered hoppers and intermodal platforms — has prompted the firm to “modestly raise” its 2011 deliveries estimate from 19,800 units to 22,500 units, the report states.
 
“Beginning in 2012, far stronger economic activities will provide support for certain rail-car assemblies while an improvement in the financial environment, higher gasoline prices and strong government backing stimulate greater demand for ethanol and DDG cars,” EPA officials said in the report. “Replacement pressures and technological advances, as well as legislative measures, will also play a role in promoting the demand for a variety of rail cars.”

As a result, rail-car deliveries will moderately increase to 32,800 units in 2012, then continue to rise annually, reaching 59,000 units in 2015, the report states.