We have reported here in the past that analysts have been reporting an expected increase in demand for railcars this year and next. Unfortunately, it has not yet developed, according to an article published on Jan. 25th in “Railway Age”. The article contained information prepared by the Railway Supply Institute’s (RSI) American Railway Car Institute Committee (ARCI) which indicated a drop in orders, deliveries, and backlog at this time. Quoting from the article:

“Carbuilders took orders for 3,397 cars in fourth-quarter 2020, a 60% falloff compared with 8,464 in fourth-quarter 2019 and a 41% decline from 5,783 in third-quarter 2020. Total orders for 2020 were 17,275—a stark contrast to 2018’s 77,478 and 2014’s peak of 138,234.”

Unfortunately, as much as people are expecting the pandemic to fade away dramatically this year, and there will be a return to “normal” (or is it the “new normal”), there is no real evidence of solid business confidence and commitment of capital to new railcars.

We continue to believe that the longer this continues, once demand picks up again it will be even more difficult to find and acquire railcars in the secondary market. This is expected to be a normal by-product of increased demand. If you can find what you anticipate your business will need; we urge you to get ahead of the coming demand cycle.

Railcar Specialists

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