Last year was a decidedly mixed one for North American locomotive manufacturers.
Orders for new locomotives were down and much of their business came from re-manufacturing, which the builders said remained strong as railroads sought cost-effective ways to increase capacity and reliability.
“While 2017 [was] a challenging year for the rail industry and we’re still in a tough environment, we have been using this time to continue diligently meeting with customers and turning our focus on how we can meet future needs,” said Brian Edwards, vice president of sales, locomotive service operations and customer performance for Progress Rail in an interview with Progressive Railroading magazine.
Progress Rail said most of its work has involved upgrading engines and control systems, with much of this work being done on intermediate or switcher locomotives.
Edwards expects the demand for these services this year to be similar to what the company did in 2017.
GE Transportation said new orders for motive power last year were soft, but the demand for locomotive overhauls has been trending up for the past two to three years.
“I would say 2017 was strong and 2018 will be stronger as our customers are looking for better capital efficiency,” said John Manison, GE’s general manager of locomotive modernizations.
“One effective way to do that is to take a heavily used locomotive and upgrade the technology on it,” he said.
Manison said most Class 1 railroads have “embarked on some sort of modernization program.”
Pennsylvania-based Brookville Equipment Corporation did not receive a single contract to build a new locomotive in 2017.
It has been focusing on two major rebuild orders while expanding an existing re-manufacturing order from seven units to eight.
Brookville executives believe there will be a “good mix” of demand for both rebuilt and new locomotives said spokesman Adam Mohney.
“Our focus will be on meeting the specific demands of our clients and looking for apparent ways to add value with both new and re-manufactured locomotive fleets,” he said.
T.J. Mahoney, the program manager at Railserve said 2017 was a challenging one for modernizations due to a soft North American market. But he sees better days ahead.
“With the economy strengthening, and factors favoring volume shifts from truck to rail, 2018 holds great promise for the industry in general,” he said. “On top of that, corporate sustainability requirements are expected to bolster demand for low-emissions locomotives, including the Railserve LEAF and Dual LEAF. Our outlook is positive this year for sustainable locomotives, both domestically and internationally.”
Like other builders, PowerRail reported a weak market for new locomotives.
“We have also seen a decline in investments in locomotive fleets, in general,” said President and Chief Executive Officer Paul Foster. “Cutting of capital rebuild projects, deferred maintenance and stored locomotives have all contributed to an overall drop in the investment in locomotive fleets.”
However, Foster said that PowerRail has maintained rebuild sales by leveraging new technology and offering reliability-driven products.
That has led it to expand its locomotive facility in Monroe, Georgia, by adding on the building and install two overhead cranes and some Class I track.
“PowerRail has focused on offering enhanced products that will help the railroads increase the service life of their locomotives,” he said.
The 72-foot-long vehicles were delivered as part of a $33 million contract for the design, build and test of the streetcars for the three-mile system, which is slated to open this year.
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