Glimmer of Good News in Freight Car Report

A railroad industry analyst has found of glimmer of good news in the 2016 second quarter freight car order report of the Railway Supply Institute.

KeyBanc Capital Markets analyst Steve Barger said the order, delivery and backlog statistics are “somewhat better than expected.”

train image2The report said that second quarter orders increased sequentially to 7,555 cars from 6,646 in the first quarter of this year.

Carbuilders delivered 15,655 railcars in the second quarter of 2016, which was a decrease from first quarter deliveries of 16,834 cars.

The freight car backlog is 89,155 units, which although down 6.2 percent from the 95,038 units of the first quarter is at historical highs.

Barger said there appears to be a replacement market that is experiencing modest growth.

Non-tank car orders totaled 4,363 units in the second quarter as opposed to 5,729 units in the first quarter.

Covered hoppers experienced the largest concentration in orders, totaling 2,017 rail cars, or about 27 percent of the total, below last quarter’s 51 percent, with mid-cube covered hoppers representing the majority of the orders at 1,286 cars, vs. 2,020 cars ordered in the first quarter.

Orders for large-cube and small-cube covered hoppers were 708 and 23 cars, respectively, as opposed to 1,335 and zero, respectively, for the first quarter.

Orders for tank cars were 3,192 units as opposed to 917 in the first quarter.

Tank cars and covered hoppers accounted for more than 69 percent of total orders in the second quarter against 64 percent last quarter.

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