Trinity Rail, GATX announce big order

Trinity Industries, Inc. and GATX Corp. announced Tuesday an agreement where Trinity Rail Group, LLC will supply GATX with 12,500 railcars in the next five years. The order will include both tank cars and freight cars.

“We are pleased to enter into this agreement with GATX,” said D. Stephen Menzies, Trinity Industries, Inc. senior vice president and Trinity Rail Group president. “This agreement provides us with a level of production continuity for the next five years. We have enjoyed a good relationship with GATX for many years, and this agreement extends that relationship.”

GATX President and CEO Brian A. Kenney said, “The committed nature of this attractive order provides GATX with clear visibility into its new railcar delivery schedule. Coupled with our extensive activity in acquiring railcars in the secondary market and consistent placement of spot orders for newly built railcars, this order enhances our ability to serve our customers and continue growing our North American fleet.”

Steve Barger, director, Industrial Manufacturers, for KeyBanc Capital Markets Inc., observed, “In our view, this long-term order, in conjunction with the recent 3,500 car order placed by CIT … supports the notion that the railcar cycle is ramping the way it typically does.”

Barger added, “In the current cycle, industry backlog has increased sequentially over the past four quarters, and going forward we believe the OEMs should continue to benefit from increasing backlogs, tightening car availability, and improved pricing.”