Carbuilding Surge Continues - new freight cars - Brief Article

Railway Age, March, 1999

New freight cars are streaming into the North American fleet at levels not seen in nearly two decades. The American Railway Car Institute reports that builders delivered 75,704 new cars in 1998, 50% more than in 1997 and the most since 1980's 85,920.

The average freight car cost was $63,000 in 1997, according to the Association of American Railroads. That would put the value of last year's freight car market at close to $5 billion.

Builders continue to operate at or near capacity: 66,390 cars were on order on Jan. 1. "This backlog assures production will remain at high levels throughout 1999," said ARCI executive director Robert A. Matthews, who is also president of the Railway Progress Institute.

Orders were placed in 1998 for 86,739 new cars, down slightly from the 88,031 cars ordered in 1997. Orders for new cars dropped to 16,725 in last year's fourth quarter, compared with 25,386 ordered in the 1998 third quarter and 37,988 in the comparable 1997 quarter.

Economic Planning Associates is estimating that nearly 70,000 cars will be delivered in 1999, with deliveries in the next five years ranging between 60,000 and 55,000. For an industry that remembers all too well the disruptive feast-or-famine cycles of just a few years ago (the 85,920-car year in 1980 was followed by a 12,080-car year in 1981), stability at almost any level will be welcome.

                      Freight cars, new (all owners)

Year Delivered
1998    75,704
1997    50,396
1996    58,017
1995    60,853
1994    53,366
1993    34,683
1992    25,761
1991    24,674
1990    32,063
1989    29,617
1988    22,524


Source: American Railway Car Institute