Greenbrier Receives $1.24 Billion in Railcar Orders
Greenbrier Cos., which makes intermodal railcars and other freight equipment, said it received $1.24 billion in new railcar orders during its first quarter.
The Lake Oswego, Oregon-based company said it received orders for 14,100 railcar units during its fiscal first quarter ended Nov. 30. The orders include double-stack intermodal units, tank cars and railcars for sand and cement transportation as well as for carrying automobiles.
Producers such as Greenbrier and Trinity Industries Inc. are expanding as buyers seek more tank cars to move surging oil shipments and get ahead of a U.S. regulatory decision that may take thousands of units already in use off the tracks, Bloomberg News reported.
“We anticipate the regulatory picture for tank cars transporting hazardous materials will be clarified with final U.S. and Canadian government actions in early 2015,” William Furman, Greenbrier’s chairman and CEO, said in a statement. “This will prompt an additional wave of new tank car orders and tank car retrofits, regardless of current oil prices. Greenbrier is strategically positioned to meet this demand.”
“Our strategy to diversify our product mix continues to pay off, with nearly two-thirds of the orders received being non-energy related. We are well-positioned to meet this broad-based demand with our efficient, flexible and lower-cost facilities. Greenbrier's business has never been better balanced than it is now,” Furman said.
The need for cars is spreading beyond the oil industry as shippers move more grain, chemicals, construction materials and autos, Michael Baudendistel, a Stifel Financial Corp. analyst, told Bloomberg. Railroads have added locomotives and cars this year to ease track congestion that has slowed trains and triggered service complaints.
U.S. Silica Holdings Inc., which mines sand used in hydraulic fracturing, has struggled to acquire new cars because of the wait times, CEO Bryan Shinn said on an Oct. 30 conference call with analysts. The Frederick, Maryland-based company has more 6,500 small-cube covered hoppers to move sand and expects to add about 2,500 by next year.
“Railcars continue to be in short supply,” Shinn said, and lead times now run as long as two years.
