Last week Railway Age provided a summary of research performed on railcar demand by Cowen and company. Cowen performs a survey of shippers which examines a number of factors, including the overall expectation of ordering railcars, types of railcars and similar factors. This report addressed Cowen’s third-quarter 2021 report.
In comparison to the second Q2021, Cowen noted three areas of increased demand; boxcars, containers, and gondolas. Railcar types featuring declining demand include hopper cars, tank cars, and center beams. Railway Age noted;
- “Roughly 48% of all shippers surveyed said they will or may order railcars in the next 12 months, in line with Cowen’s 2Q21 survey. About 52% said they do not plan to order railcars, compared to 53% in 2Q21. “The largely unchanged result suggests that demand remains strong, but that the steel premium may still be keeping some buyers on the sidelines,” the analysts noted. “This should continue to give momentum to lease rates on existing fleets.”
- “On a same-shipper basis, about 45% of same shippers in 3Q21 said they will or may order railcars, compared to 43% in 2Q21. Roughly 55% do not plan to order railcars, compared to 57% in 2Q21. Within the 45% of same shippers who are contemplating orders in the next 12 months, 53% said: “yes,” they plan to place orders (47% in 2Q21), while 47% said, “maybe” (53% in 2Q21). “The results of this question are an incremental positive for railcar demand over the next 12 months,” Cowen noted.”
- “Cowen also reported that 76% of participants stated that they are having trouble hiring employees, up from 71% in 2Q21; 18% are not having trouble, down 3% sequentially. “We have heard from many industry contacts that hiring has been a significant headwind due to various macro factors that have made it difficult for companies to grow headcount,” Seidl, Elkott, and Alper noted. “Of the 76% having trouble hiring employees, 49% believe that it is hindering growth, up significantly from 35% last quarter.”
It would seem the rail industry is similarly situated to other sectors of our economy; employers are having trouble finding workers and companies are unsure about making new investments. There is no question that workers need incentives to take a productive role in our economy, not the opposite.