Greenbrier’s fiscal second-quarter 2020 financial results (the company begins its fiscal year on Oct. 1 of the prior year) are based on orders of 8,500 railcars valued at more than $815 million, a “Strong liquidity position targeting $1 billion of available liquidity,” and a $3.2 billion backlog that “provides forward visibility.”
What is the depth of decrease in freight volumes as a result of COVID-19? Is there an increased percentage of freight rail moving over to trucking right now? What individual markets/commodities are under more stress as a result of the crisis? How will the railroads respond to the freight loss in the overall landscape of the PSR movement? Will Wall Street change its perspective on the railroads? Are there projected revisions to new-car builds for 2020? What is the state of the equipment leasing market, for both lessors and lessees? Is there timing for a return to normalcy?
Citing “increased macroeconomic uncertainty and corporate debt in focus across various sectors,” Cowen and Company recently delved into current debt levels at major railroad and trucking firms, and discussed actions these companies could take to combat the difficult times.
On March 3, 2020, Railway Age published my early observations on the COVID-19 pandemic’s potential impact on North America’s freight railroads. In just over three weeks, our world has become a very different place.
Trinity Industries, Inc. realigned responsibilities for some of its most senior executives, effective April 1, 2020. Specifically, Eric R. Marchetto has been appointed Chief Financial Officer, and W. Relle Howard, currently Vice President and Chief Administrative Officer, will return to his previous role as Chief Information Officer.
Cowen and Company revealed three factors that could position railcar lessors well in the intermediate to long-term: Financial investors looking for hard, yield-generating assets amid further interest rate declines; partial, lease-term-driven insulation; and “our view that lease rates will be first to rebound in the rail equipment market when a freight recovery occurs.”
A Union Pacific locomotive engineer based in the Pacific Northwest who had just received his notice of exemption from travel restrictions proudly told Railway Age Contributing Editor Bruce Kelly, “We’ve gone from building America to saving it.” This UP field employee in Train & Engine Service has embraced his railroad’s slogan, “Building America,” and his heartfelt statement takes it to a higher level—from motto to mantra.
Following is a staff report from the editors at Railway Age, Railway Track & Structures and International Railway Journal that will be continuously updated with the latest developments surrounding the COVID-19 pandemic and the global railway industry, the most significant posted up top.
There are multiple contrasting intermodal market outlooks for 2020. Intermodal volume growth is illusive in 2020. One thing is certain: Fewer new intermodal cars are needed.
Cowen and Co. analyst Matt Elkott participated in the 2020 Rail Equipment Finance Conference (REF) in La Quinta, Calif., the largest annual gathering dedicated to North American freight railcars and locomotives. He offers the following observations:
