According to its quarterly freight car building forecast released July 29, 2013 the Economic Planning Associates, Inc. (EPA) expects this year’s numbers, which are 11 percent behind 2012, to improve significantly in 2014. EPA’s president Peter Toja stated that based on first half assemblies and mid-year backlogs the EPA expects deliveries of 52,500 railcars in 2013, 10.8 percent below the 2012 level. Next year they anticipate a rebound to 60,300 deliveries. Toja predicts that beginning in 2015 and continuing through to the end of year 2018 annual railcar assembly will be relatively consistent, staying in the range of 64,300 to 65,500 cars and intermodal platforms.
In the first quarter of 2013 tank cars accounted for 80.6 percent of total orders, while in the second quarter the tank cars comprised only 46.8 percent of the total orders as demand for boxcars, mid-sized covered hoppers, small-cube covered hoppers and intermodal platforms pick up. Toja is optimistic that this means the demand for railcars has broadened, with regards to car type. However Toja noted that the EPA is still aware of the fact that tank cars currently comprise 83.2 percent of the backlogs and the struggling economy might stifle the future growth of other car types. At the current rate of assembles the tank car backlog represents nearly 9 quarters of production and the EPA expects the demand to remain on a high note for the foreseeable future due to all the investments in facilities and equipment railroads are making to accommodate the rapid expansion of oil production.
Toja stated that the EPA looks for some stabilizing in demand for boxcars and graincars, while anticipating a pickup in demand for small cube hoppers, intermodal equipment and continued rapid expansion in tank car demand. However they believe the easing in manufacturing output and demand for steel will reduce any growth in mill gondolas and steel coil cars. Coal cars, according to Toja, are certain to experience a week 2013 before showing signs of modest improvement in 2014 due to the stringent EPA standards they are plagued with.
In spite of continued investments by the railroads, 2013 will be a difficult year for carbuilders, noted Toja. With the exception of tank cars, which will experience explosive growth in assembles this year, most car types will see moderation or declines in deliveries due to the struggling economy.
