Rail Freight’s Down, Equipment Orders to Fall

The continually deteriorating economy is taking a toll on the rail freight industry that is finding reflection in the forecast of orders for railcars in 2009.

While the total volume of 1.46 trillion ton-miles through the first 43 weeks of 2008 was up 0.7% year over year, according the Association of American Railroads (AAR), cumulative volume was 13,996,433 carloads, down 0.4%. The total of 9,692,715 of trailers or containers was down 3.0%.

Looking at combined statistics for US and Canadian railroads for the first 43 weeks of the year, the 17,189,298 carloads represent a decline of 1.2% from 2007. Trailer and container traffic at 11,775,907 was down 1.9%.

In transportation and equipment forecasting firm FTR Associates’ interim rail equipment forecast for 2009, it expects deliveries to fall to 29,000, a significant decline. Third quarter 2008 orders were at an annual rate of 30,800 units. The report is a supplement to its authoritative North American Railroad Equipment & Deliveries Outlook.

“Without freight to haul,” observes Eric Starks, FTR president, “demand for transportation equipment has already begun to wane. We are forecasting a severe downturn in 2009.”