(Photograph Courtesy of Port of Long Beach)

Cowen: Measuring Supply Chain Shifts

A COVID-induced supply chain spiral led to a logistical conundrum that forced shippers and executive teams to adapt to an ever-changing global environment. As the dust begins to settle, we, at Cowen Research, are taking a closer look at the more long-lasting changes across the supply chain and consumers. A multi-sector angle provides insight into the long-term impact for supply chains and beneficiaries of these shifts.

“Despite a volatile macro environment, we continue to identify attractive long-term growth opportunities in our markets in addition to the signing of a new railcar supply agreement in North America [with Trinity Industries],” GATX Corporation President and CEO Robert C. Lyons said on Oct. 25.

GATX 3Q22: Demand ‘Strong,’ Lease Rates Rise

“Demand for railcars remains strong across our global fleets,” GATX Corporation President and CEO Robert C. Lyons said during a third-quarter 2022 financial report on Oct. 25. “Fleet utilization at Rail North America remains high at 99.6% and our renewal success rate was 87.2% during the quarter.”

“We continue to be enthusiastic about our business, and expect a solid fourth quarter to close the year with strong momentum and visibility for 2023,” Trinity President and CEO Jean Savage said on Oct. 25.

Trinity’s Savage: ‘Strong Momentum’ for 2023

Trinity Industries on Oct. 25 reported third-quarter 2022 GAAP and adjusted earnings that “show progress and improvement in our business,” according to President and CEO Jean Savage. “We continue to believe we will perform well in the coming years given our robust backlog and the favorable re-pricing environment for lease rates.”

“Order expectations from shippers’ remain relatively in line from our second-quarter survey, but the level of certainty moderately declined in our recent survey,” Cowen analysts report. “It appears that gondolas saw demand improvement relative to second-quarter 2022. Boxcars declined relative to second-quarter 2022.”

Cowen: 3Q22 Shipper Surveys Say …

According to Cowen and Company’s recently conducted third-quarter 2022 Rail Equipment and Rail Shipper surveys, the positive outlook for railcar orders remains relatively unchanged from the second quarter, and rail shipping pricing expectations have ticked down sequentially. Details follow, plus insights on the Class I railroads, ahead of earnings.

Union Pacific on June 7 joined the RailPulse coalition, which was formed in late 2020 to “develop, broaden and accelerate the use of GPS and other telematics technologies in North America’s freight rail industry.”

RailPulse Outlines Three-Phase Pilot

RailPulse is developing a cloud-based telematics platform in an aim “to accelerate the adoption of GPS and other technologies across the North American railcar network.” Late last month, it outlined a three-phase approach to development, which is slated to be complete in second-quarter 2023.

Trinity Lands $1.8B Multi-Year Railcar Order

Trinity Industries on Oct. 3 reported that it will supply a mix of 15,000 newly built tank and freight railcars to GATX through 2028, with GATX having an option to order up to 500 more railcars per year from 2023 to 2028.

Erik Henstra has joined global tank container leasing company Trifleet as Managing Director. Trifleet is a wholly owned subsidiary of Chicago-based GATX Corporation. (Photograph Courtesy of GATX)
  • News

People News: GATX, Bentley, APTA

GATX’s Trifleet Leasing Holding B.V. appoints Erik Henstra as Managing Director. Also, Bentley Systems names Michael Campbell Chief Product Officer and expands the responsibilities of four executives; and the American Public Transportation Association (APTA) selects new Vice Chair and announces Executive Committee and Board of Directors nominees.

“Demand for the majority of railcar types in our fleet remains robust, and absolute lease rates increased sequentially for the eighth consecutive quarter,” GATX President and CEO Robert C. Lyons said during a second-quarter 2022 financials report. (Photograph Courtesy of GATX)

GATX Ups 2022 Earnings Expectations on Global Rail Market ‘Strength’

“Despite ongoing macroeconomic uncertainty, the operating environment remains strong across our global railcar leasing markets,” GATX President and CEO Robert C. Lyons said during a report on second-quarter 2022 financials, which included Rail North America fleet utilization of 99.4% and a renewal success rate of 87.7%.

Matt Elkott

Cowen: GATX ‘Improving Return Dynamics’

GATX has taken advantage of low interest rates over the past few years to improve its debt profile, which is currently 90% fixed, with an average maturity of 10 years. Meanwhile, spot lease rates are expected to continue their seven-quarter run of sequential growth. This should lead to progressively higher returns for the company, which is now likely to focus on locking into much higher lease terms.