2020 GUIDE TO EQUIPMENT LEASING
PATIENCE IS A VIRTUE
elcome to the 2020 Railway Age Guide to Equipment Leasing. It would not be an exaggeration to say that heading into midyear 2020, the railroad industry and railcar owners and operators are dealing with times and circumstances heretofore never seen in the rail industry and to the lives of those working in it. The relentless, exhaustive and ever increasing shadow of the COVID19 pandemic has impacted domestic and global business in ways that were
10 Railway Age // June 2020
unimaginable four months ago. This is acutely felt throughout the North American rail business. The statistics are generally awful right now. YOY railcar loadings are down 11.8%, while intermodal loadings are down 10.9% (through April 30, 2020 vs. 2019). Loadings levels have dropped below the level seen during the Great Recession in 2009. Perhaps worse still, freight was already feeling downward pressure heading into 2020. For rail freight, the pandemic is more than from the frying pan into fire. It is the frying pan into a lava pit. The projections for the remainder of 2020 are dire. New railcar deliveries are projected
to be close to or even below 20,000 units (from a February 2020 projection of 35,000 units). This is impacting the value of existing cars. Together, the lack of demand for new and used cars is having the same impact on the lease market for cars. In other words, pretty much everything is in a down cycle. It is widely expected for 400,000 stored cars to increase by at least 25%. Chemicals and farm products (except grain) have been the most resilient loadingswise to date, while autos and auto parts have been an expected and notable underperformer. An outsized decrease in coal loadings has surprised to the downside. Coal’s railwayage.com
William C. Vantuono
W
BY DAVID NAHASS, FINANCIAL EDITOR
