Greenbrier received orders for 5,600 railcar units valued at roughly US$460M in fiscal Q2; current downward trends in train velocity expected to lead to stronger demand for certain railcar types in future, company says
LAKE OSWEGO, Oregon
March 3, 2014
– ~ Orders diversified across a broad range of railcar types
~~ Strong intermodal fundamentals lead to recent order for 1,200 platforms
The Greenbrier Companies, Inc. (GBX) announced today that it received new orders in the second fiscal quarter ended February 28, 2014 for 5,600 railcar units valued at approximately $460 million. These orders include a recent award for 1,200 intermodal platforms. Other orders include small cube covered hoppers and tank cars used in the energy sector, automotive-related products, medium and large cube covered hopper cars for the grain and plastic pellet markets, boxcars for paper and forest products markets, and gondola cars for metal and scrap. Current downward trends in railroad train velocity are expected to lead to stronger demand for certain railcar types in the future.
The orders announced today include 1,100 units valued at approximately $130 million received in December 2013 and first reported in Greenbrier's press release dated January 8, 2014. Since September 1, 2013, the beginning of the Company's fiscal year, Greenbrier has received orders for nearly 8,200 railcars in North America and Europe valued at over $690 million.
DEMAND AIDED BY VELOCITY REDUCTIONS
William A. Furman, chairman and chief executive officer of Greenbrier said, "Our business is benefitting from broad-based demand for all of our car types, including increased demand for intermodal platforms as intermodal loadings accelerate and rail velocity slows due to system congestion. An important aspect of the new tank car operating safety standards is the requirement for reduced railway speeds for most trains carrying crude oil. Slower train speed means velocity across the entire network will likely be affected. As velocity on the rails slows, we believe there will be an increase in demand for certain railcar types carried in unit trains, such as grain and intermodal."
TANK CAR OF THE FUTURE
Furman concluded, "As a result of the energy renaissance in the U.S., crude by rail shipments have climbed from 9,500 carloads in 2008 to more than 400,000 carloads in 2013. While 99.97% of these shipments arrive without incident, our common goal should be zero rail incidents. We are pleased that the AAR and DOT have taken steps to make rail transport safer for both our communities and environment with new operating standards. We recently announced our new tank car design which includes a thicker hull, high-flow pressure relief valves, head shields, top fittings protection, and thermal protection. These characteristics of our "tank car of the future" align with the recent request for proposal issued by the BNSF Railway Company to build up to 5,000 tank cars with enhanced safety performance requirements. Additionally we are offering retrofit alternatives for the legacy tank car fleet, including the most recently built CPC-1232 tank cars, with features that will reduce the likelihood of tank cars releasing contents in derailments. Our approach to tank car safety advances both public safety and environmental protection, strengthens the North American tank car fleet and permits safer operations at any speed."
Certain orders in this release are subject to customary documentation and completion of terms.
Greenbrier (www.gbrx.com), headquartered in Lake Oswego, Oregon, is a leading supplier of transportation equipment and services to the railroad industry. Greenbrier builds new railroad freight cars in its four manufacturing facilities in the U.S. and Mexico and marine barges at its U.S. facility. It also repairs and refurbishes freight cars and provides wheels and railcar parts at 36 locations across North America. Greenbrier builds new railroad freight cars and refurbishes freight cars for the European market through both its operations in Poland and various subcontractor facilities throughout Europe. Greenbrier owns approximately 8,100 railcars, and performs management services for approximately 233,000 railcars.