2016 Guide to Equipment Leasing
From the May 2106 issue of Railway Age: “It never hurts to keep looking for sunshine,” Eeyore once said. However, in the rail economy, it’s the end of first-quarter 2016, and the market is mired in a slump.
From the May 2106 issue of Railway Age: “It never hurts to keep looking for sunshine,” Eeyore once said. However, in the rail economy, it’s the end of first-quarter 2016, and the market is mired in a slump.
Indeed, 2015 was an amazing year for those parties involved in rail equipment and in the affiliated industries. What started out as a downtrend in oil pricing moved to a full-on slowdown in commodity demand on a global scale. (Hopefully, if you thought WTI Crude would bottom out in December 2015 below $35/bbl, you’re reading this from your new palatial estate.) This led to a downturn in railcar loadings, railcar and locomotive demand and lease rates. It led to an increase in railroad velocity and a decrease in terminal dwell times, which softened demand and rates even further.
The rail industry and its many observers have been absorbed by the Canadian Pacific Railway’s pursuit of Norfolk Southern. Without recounting the entire story, the whole scenario (minus the regulatory stew that would be an integral part of any Class I merger) is a classic “boy meets girl” scenario with a twist.
There is more to life than tank cars. Though you may not believe it, other car markets do exist and continue to operate while tank cars dominate the headlines. Here’s what’s going on around the horn.