Although U.S. rail volumes have been sluggish in 2023, Greenbrier’s orders for new rail cars have been anything but. The manufacturer received orders for 15,300 rail cars with an aggregate value of $1.9 billion in its fourth fiscal quarter, which ended Aug. 31.
These orders, which spanned a range of rail car types and represented a breadth of customers, yielded Greenbrier’s highest quarterly order count “in nearly a decade,” Greenbrier (NYSE: GBX) said in a Thursday news release. The rail car orders exclude any multiyear order activity, according to the company.
“The diverse range of orders across railcar types exceeded Greenbrier’s expectations for the quarter. It also indicates Greenbrier’s strength in our North American and European markets. Order levels are distinct from the high demand seen during the crude-by-rail era of the 2010s. Today, one or two railcar types are not powering the market,” Brian Comstock, Greenbrier’s chief commercial and leasing officer, said.
The boost in new orders comes despite U.S. rail volumes being flat to lower for much of 2023. Carload traffic is up 0.1% year to date as of last Saturday, while intermodal volumes are down 8.7% year over year, according to the Association of American Railroads.
However, looming retirements for certain rail car types, such as boxcars, are helping to drive the new order activity.
“Although railcar loadings are not fully back at pre-pandemic levels, we believe that growth in key commodity markets will keep railcar demand steady and above replacement levels in future periods,” Comstock said.
The size and value of the new orders will lend support to Lake Oswego, Oregon-based Greenbrier in 2024, the company’s leaders said. Greenbrier expects to report its fiscal fourth-quarter and 2023 results on Oct. 25.
“Greenbrier continued its solid operational execution, and our Commercial team performed exceptionally in our fiscal fourth quarter. Our backlog and this order activity provide clear visibility through fiscal 2024, increasing our confidence in our operating expectations,” Greenbrier President and CEO Lorie Tekorius said in a statement. “Further, our leasing and aftermarket services businesses will provide additional stability and balance through economic cycles.”
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