According to recent reports from FTR Associates (www.ftrassociates.net), a leading transportation forecast and research firm, demand for railcars will remain at historically high levels throughout the next few years. Total ton miles for rail freight is expected to rise 2.1% in 2006, 2.6% in 2007 and 2.1% in 2008. Additionally, rail equipment remains capacity constrained causing strong order activity that is far outpacing current deliveries. The resulting historically high backlogs are likely to pressure manufacturers to increase production levels for rail cars in the near future.
The rail industry continues to be supported by strong demand from its traditional sources of freight; coal, intermodal and to a lesser extent farm products, while demand for housing materials and chemicals have slowed. Eric Starks, President of FTR Associates commented in the company’s June Rails Ahead newsletter, “With its two largest segments of freight doing well (coal and intermodal), railroads are less concerned about slowing growth from other freight sectors. The slowing in demand from non-core segments should allow the railroads to start making much needed improvements in productivity and turn around times. Average speeds are already showing improvement and with better service capabilities, demand for freight to be moved by the railroads is expected to grow at a strong pace over the next year.”
FTR Associates, located in Nashville, IN has been a leader in transportation forecasting for over 20 years. The company’s US Freight Model collects and analyzes all data likely to impact freight movement and is based on specific characteristics for over 200 commodity groups. FTR Associates’ forecast reports cover trucking and rail transportation and include demand analysis for commercial vehicle as well as railcar. Specially designed reports are offered to participants in both industries to cover specific needs. For more information about the work of FTR Associates, visit www.ftrassociates.net.