Demand for railcars up as system velocity drops

LAKE OSWEGO, Oregon—Railcar manufacturer Greenbrier has received new orders for 5,600 railcar units valued at approximately $460 million. These orders include a recent award for 1,200 intermodal platforms. Other orders include small cube covered hoppers and tank cars used in the energy sector, automotive-related products, medium- and large-cube covered hopper cars for the grain and plastic pellet markets, boxcars for paper and forest products markets, and gondola cars for metal and scrap.

William Furman, chairman and chief executive officer of Greenbrier said, “Our business is benefitting from broad-based demand for all of our car types, including increased demand for intermodal platforms as intermodal loadings accelerate and rail velocity slows due to system congestion. An important aspect of the new tank car operating safety standards is the requirement for reduced railway speeds for most trains carrying crude oil. Slower train speed means velocity across the entire network will likely be affected. As velocity on the rails slows, we believe there will be an increase in demand for certain railcar types carried in unit trains, such as grain and intermodal.”

Furman also noted the new operating standards for crude oil transport. Greenbrier is introducing a new tank car design which includes a thicker hull, high-flow pressure relief valves, head shields, top fittings protection, and thermal protection.