Trinity Rail Group and GATX have entered into a $1.8 billion long-term railcar supply agreement, both parties announced Monday.
The agreement calls for Trinity Rail Group, a subsidiary of Trinity Industries (NYSE: TRN), to supply railcar lessor GATX (NYSE: GATX) with a mix of 15,000 newly built tank and freight railcars over six years.
Railcar manufacturer and lessor Trinity, headquartered in Dallas, will deliver 6,000 tank cars at a rate of 1,200 cars each year between 2024 and 2028, and a mix of 9,000 freight and tank cars will be delivered at a rate of 1,500 cars per order year between 2023 and 2028. The schedule of those deliveries must still be determined.
Chicago-based GATX will also have the opportunity to order an additional 500 railcars each year.
GATX President and CEO Bob Lyons said the agreement builds upon an existing agreement that is set to expire at the end of 2023.
“This is an opportune time to establish a new agreement with Trinity, a proven supplier to GATX. We now have long-term access to a wide range of car types, enabling us to continue serving our large and diverse customer base,” Lyons said in the announcement. “We expect this order will cover our base fleet reinvestment needs in North America through 2028, and we will continue to pursue additional attractive investment opportunities in the new and secondary railcar markets.”
Said Trinity President and CEO Jean Savage: “This multi-year railcar order with GATX represents the extension of a strong partnership. We are proud of the relationship we have built with GATX and pleased that they have once again selected TrinityRail as the premier North American railcar manufacturer.”