Thursday, January 16, 2014

Railway Age's 2014 Passenger Railcar Outlook

Written by 
Washington, D.C. streetcar test Washington, D.C. streetcar test Ken Briers
The customer pool for North American passenger car suppliers keeps growing, as Railway Age reports in its January 2014 issue.

Not that suppliers are unaware of that fact. Suppliers intent on tapping that pool made their desires clear in 2011 during the American Public Transportation Association (APTA) Annual Meeting in New Orleans. It was reinforced by the players bidding in 2012 to build new gear. In 2013, many of those players saw their bids rewarded.

Last year, Railway Age noted that “the supplier numbers multiply, as stalwarts such as Siemens Mobility, already a U.S. powerhouse for light rail transit, face growing competition from relative upstarts who have landed equipment orders, such as United Streetcar, LLC, Pacifica Marine, and Brookville Equipment Corp. Still other suppliers seek to score their first North American streetcar order, KinkiSharyo International and CAF America among them. The potential client list may offer plenty of opportunities in 2013 and beyond, as cities across the U.S. opt for streetcar startups.”

That trend, in fact, did prevail, and shows few signs of a letup as 2014 begins, judging from results compiled for our 2014 Passenger Car Outlook, for both new and rebuilt cars (January 2014 issue, Digital Edition. See pp. 50-51). That survey shows 1,175 cars delivered in 2013, and a backlog of a whopping 5,167 cars—a number that has increased for at least the past five years. Orders for another 2,600 cars (approximately) are expected to be placed in 2014. The five-year (2015-2019) outlook indicates that orders for about 2,700 cars are likely to developed.

Look local, suppliers

The forecast made in early 2013 for suppliers concerning streetcars proved potent and accurate as well, when we wrote: “By the numbers, most streetcar orders are relatively small. But the number of streetcar orders suggests big market changes ahead for the supplier industry.” What’s emerged more clearly, however, is the customer venue, which has taken a distinctly local flavor as municipalities, and even individual neighborhoods of a city, begin to drive the process toward a streetcar purchase.

Suppliers, in short, should take note that, in this case, often it’s not the regional transit agency driving the process (though, per TriMet and DART, assistance is forthcoming). That can be good news, since for suppliers large and small it means an expanded potential customer base.

The emphasis on local activity (and resultant local benefits) is backed by survey results released last June by Mineta Transportation Institute (MTI). The survey, titled America’s Support for Public Transportation, indicates growing support for expanding public transportation, with nearly 74% of respondents amenable to the use of their tax dollars to create, expand, and improve public transportation in their community. The number of respondents increased from an already solid 69% of Americans in support in 2012 to nearly 74% in favor during 2013.

“We are experiencing this surge in support because citizens can see, touch, and feel the economic impact of investing in public transportation,” said American Public Transportation Association (APTA) Chairwoman Flora Castillo. “This survey emphasizes that public transit plays a great role in society because it directly touches people’s lives.”

Still waiting for HSR orders

Comparatively stagnant, by contrast, is the looming orders expected for high speed rail (HSR) equipment to be placed by both Amtrak and the state of California. Early in 2013, the two entities announced their intent to place a joint equipment order to benefit from economies of manufacturing scale, with Amtrak acquiring 32 trainsets and California purchasing 27.

Skeptics pointed out that while such economies were possible, California’s potential order for equipment was aiming for top speeds of 220 mph, while Amtrak’s plans to replace Acela Express gear would only necessitate equipment capable of 160 mph, presumably on the 24-mile “New Jersey Raceway” portion of its Northeast Corridor now being upgraded.

By contrast, Sumitomo Corp. of America and partners Nippon Sharyo in 2013 commenced production of 130 intercity rail cars for use in several Midwest states (led by Illinois), as well as California, part of a multistate effort to generate higher-speed rail (HrSR) service. As noted in 2013, California’s participation in the $352 million contract is noteworthy, since the Sumitomo equipment will be designed for operation at speeds up to 125 mph, making it an interim equipment move for the Golden State.

California can use the equipment already. Last November Caltrans announced record ridership for both Amtrak’s Pacific Surfliner route, linking San Diego and Los Angeles, and San Joaquin service, running from Bakersfield to the Bay Area and Sacramento, the state capital, during Amtrak’s fiscal year 2013, ending Sept. 30. Caltrans officials said the Pacific Surfliner had more than 2.7 million riders, while the San Joaquins carried more than 1.2 million passengers.

Tried and true

Rounding out supplier activity, regional (commuter) railcar manufacture was a mainstay during 2013, with SEPTA receiving the final cars of its 120-car Silverliner V electric multiple-unit (EMU) order from Hyundai-Rotem. Kawasaki Rail Corp. continued delivery M-8 EMUs to MTA Metro-North Railroad, even as the supplier landed a huge $1.8 billion joint order from Metro-North and sister Long Island Rail Road for an anticipated 584 M-9 cars.

Bombardier Transportation, meanwhile, wrapped up an NJ Transit MultiLevel car order by delivering the last 56 cars of a 100-car add-on order placed in 2010. Bombardier simultaneously assisted NJ Transit in repairing MultiLevel equipment damaged by Superstorm Sandy in October 2012.

Regional rail equipment deliveries should remain strong during 2014 as several agencies, including established players such as Chicago’s Metra and relative newcomers, such as Somona Marin Area Rail Transit (SMART), receive their respective orders.

Hewing more closely to tradition, the big transit agencies, such as MTA New York City Transit, Chicago Transit Authority, San Francisco’s BART, Toronto Transit Commission (TTC), and Washington’s WMATA, were in the midst of big-number deliveries for their respective rapid transit systems. Those elder statesmen were joined by relative newcomers in rapid transit, such as Miami-Dade Transit and Honolulu’s HART, also anticipating equipment arrival during 2014.