Eastern Railroad Discussion > Greenbrier Earnings Call 20251028

Greenbrier, the manufacturer of rail cars, had a conference call with analysts following its lackluster earnings report.  The company reported an order backlog of 16,000 new railcars and about 2, 400 new railcar orders this year. Typically they will manufacture about 3,000 new cars each year.

The company has expanded its Mexican facility, which will serve both the Mexican market and some of the US market.  Orders for "simple" cars like boxcars and gondolas are pressured and price sensitive.  Orders for specialized tank cars for oil, chemicals, etc remain very strong and Greenbrier has significant market share.  The company had also increased its business in renewing older tank cars as the petro industry expects an upturn in production.

The company was asked about the impact of tariffs, but didn't say much.  Their leasing and fleet management business is doing extremely well.

Curious if the new railcar orders are replacing obsolete cars?  Or are the purchasers growing their fleets?

cjvrr Wrote:
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> Curious if the new railcar orders are replacing
> obsolete cars?  Or are the purchasers growing
> their fleets?

Little bit of both, but mostly modernization (new cars replacing older cars).  GATX gave a presentation last week at an industry event that shows how cars fleets are shifting, but overall car fleet size is relatively stagnate in the 1.6 to 1.7 million car range. And while the size is fairly consistent, the average age is falling, and the ownership demographics are greatly changing.   In 2008, railroads owned 28% of the fleet - today that is down to 15%.  Shippers owned 20% of the fleet - that has slipped to 17% as shippers concentrate on their primary business and not want the assets or management of the assets on their books.  TTX, which we should all know is owned by the railroads themselves) has grown from 9% of the fleet in 2008 to 11% today.  The big move is leasing companies.  In 2008, they owned 43% of the fleet - today it's 57%. 

 

Thank you scraphauler for the additional details.

There are exceptions to "same size" railcars though. New boxcars (obviously a shrinking percentage of the total fleet) replacing aging out fifty footers are quite a bit larger, at least in cubes. And new design three bay grain hauling covered hoppers also are a bit larger in capacity.