Rail Theory Forecasts™ LLC

Annual Publication

North American Rail Car Market

Press Releases

Rail Theory Forecasts TM LLC: “Railcar deliveries may top 60,000 in 2008”

Portland, Oregon, October 28, 2008 — Rail Theory Forecasts, a market analysis and railroad industry forecasting company, noted that railcar deliveries in the third quarter were 11% higher than those reported for the second quarter and that this quarter was the first time since the second quarter of 2006 that deliveries did not decline from the previous period. Deliveries of coal and grain cars surged during the third quarter and the high production rates for these car types are expected to continue until the end of the year.

Toby Kolstad, Rail Theory Forecasts president, said, “The economic stimulus package passed by Congress in February gave fleet owners a great incentive to acquire railcars in 2008, and deliveries that had been forecasted to total only 48,000 railcars this year might reach as high as 60,000 units as a result of this legislation.”

Rail Theory Forecasts™ ------Train Speeds Improve.

Portland, Oregon, March 31, 2006 — Rail Theory Forecasts, a market analysis and railroad industry forecasting company, has noted that all railroads that report their train speeds to the AAR have recorded improvements for the 1Q06 over their 4Q05 performance. Among U.S. carriers, speeds of CSX trains increased 6% and UP trains were 4% faster. In Canada, CPR posted a 13% improvement.

Toby Kolstad, Rail Theory Forecasts president, said, “If train speeds just stop decreasing, it will mean the end to the artificial demand that has spurred orders for new coal and intermodal cars more than the traffic gains required. If the speeds continue to improve at the rate recorded during the first quarter, a negative demand will soon appear because of all the cars that have been built to accommodate the slow train operation.” 

Rail Theory Forecasts, based near Portland, Oregon, is a financial and economic consulting company specializing in the railroad industry. The company publishes the North American Freight Car Market, a survey of railcar traffic and new railcar construction and all of the economic factors that affect the railroad industry.

Rail Theory Forecasts™ sees 64,000 new railcars in 2006.

Portland, Oregon, January 23, 2006 — Rail Theory Forecasts, a market analysis and railroad industry forecasting company, projects that new railcar deliveries in 2006 should reach 64,000 cars, slightly less than the number of cars produced in 2005.

Toby Kolstad, Rail Theory Forecasts president, said, “The continuous slowdown in train speeds during the last two years introduced an artificial demand for more freight cars than would have been otherwise ordered as increased car cycle times have required more cars to handle existing traffic. When train speeds stabilize, the artificial demand will cease. ” 

Rail Theory Forecasts, based near Portland, Oregon, is a financial and economic consulting company specializing in the railroad industry. The company publishes the North American Freight Car Market, a survey of railcar traffic and new railcar construction and all of the economic factors that affect the railroad industry.

Rail Theory Forecasts™ sees intermodal growth slowing to 3.8% in 2005.

Portland, Oregon, June 6, 2005 — Rail Theory Forecasts, a market analysis and railroad industry forecasting company, projects that rate of growth for intermodal loadings by the railroads will drop from the 10.4% rate that was recorded in 2004 to less that 6% in 2005. During the first five months of the year, loads were up 7.2% over last year, but the trend in recent weeks has pointed to lower numbers for the rest of the year. The RTF employs a statistical model to predict intermodal growth based on several factors including the value of merchandize imports and retail sales. Recent values for these factors imply a 2005 intermodal growth of 5.7%.

Toby Kolstad, Rail Theory Forecasts president, said, “If the current loading trends continue, deliveries for intermodal cars should fall in 2006 well below the 14,000 cars that have been forecasted for 2005.” 

The recent slowdown in retail sales is the main factor affecting the current rate of intermodal loadings, but the slowdown will eventually be reflected in a drop in imported merchandize, one of the main drivers of intermodal loads.

Rail Theory Forecasts, based near Portland, Oregon, is a financial and economic consulting company specializing in the railroad industry. The company publishes the North American Freight Car Market, a survey of railcar traffic and new railcar construction and all of the economic factors that affect the railroad industry.

Rail Theory Forecasts™ now sees 60,500 new railcars in 2005

Portland, Oregon, April 28, 2005 — Rail Theory Forecasts, a market analysis and railroad industry forecasting company, projects that at least 60,500 new railcars will be delivered in 2005, an increase of 15% over its previous forecasts of 52,300 cars in October 2004. In spite of universal complaints about cast parts shortages, railcar manufacturers were able to increase their quarterly production rate from 12,000 to 15,000 cars during the fourth quarter of last year and have maintained that rate of delivery during the first quarter of 2005.

Toby Kolstad, Rail Theory Forecasts president, said, “Heavy orders for coal cars and intermodal equipment boosted first quarter sales to over 17,000 cars and increased the backlog of orders over the Dec.31, 2004 total. For the last 15 months, the order rate would support a 70,000 car delivery rate, if the builders could increase production.”

The inflated price of the new railcars has only dampened the demand for boxcars, none of which have been ordered in over 6 months. The demand for all other car types seems to be insensitive to price.

Rail Theory Forecasts, based near Portland, Oregon, is a financial and economic consulting company specializing in the railroad industry. The company publishes the North American Freight Car Market, a survey of railcar traffic and new railcar construction and all of the economic factors that affect the railroad industry.

Rail Theory Forecasts™ sees railroad ton miles up 3.2% in 2005.

Portland, Oregon, March 31, 2004 — Rail Theory Forecasts, a market analysis and railroad industry forecasting company, projects that U.S. railroads will see a 3.2% increase in ton miles during 2005, adding over 50 billion ton miles to the 2004 total. An increase of this magnitude will require at least 600 new high horsepower locomotives, not including those engines needed to replace planned retirements.

Toby Kolstad, Rail Theory Forecasts president, said, “In addition to intermodal traffic which has continued to grow at an annual rate of 9% for the last two years, the energy and material industries are straining the capacity of the railroad industry, and the additional ton miles should preclude any short term improvements in train speed and freight car utilization rates.” 

Until traffic stabilizes, the artificial demand for additional freight cars to compensate for the lengthened car cycle times will remain high. Notwithstanding the high railcar prices driven by the jump in steel costs, deliveries of new cars should increase by 30% in 2005.

Rail Theory Forecasts™ sees 52,300 new railcar deliveries in 2005.
Portland, Oregon, December 26, 2004 — Rail Theory Forecasts, a market analysis and railroad industry forecasting company, projects today that 52,300 new railcars will be delivered in 2005. This represents an 18% increase over the 44,300 cars that are estimated to be delivered in 2004.
Toby Kolstad, Rail Theory Forecasts president, said, “The increase in deliveries is due in part to a large backlog of orders that have accumulated from the shortage of cast parts that has persisted since 2003, and in part to a double digit surge in orders for certain car types such as intermodal equipment.”

Rail Theory Forecasts™ sees drop in steel prices for industry suppliers.
Portland, Oregon, October 26, 2004 — Rail Theory Forecasts, a market analysis and railroad industry forecasting company, projects today that the price of plate and flat rolled steel products used by North American railcar manufacturers will decline up to 50% in 2005 from their highs of 2004. Rail Theory Forecasts bases this projection on a correlation of factors that led to the price increases in 2004 and new industry forecasts for those factors in 2005.
Toby Kolstad, Rail Theory Forecasts president, said, “Since the steep escalation of railcar prices in 2004 has not constrained orders for new railcars this year, it cannot be automatically inferred that new freight car prices will decline in 2005, but past experience would lead one to expect the builders to pass most of the savings in material costs to the buyers.”
The prices of cast products are expected to remain high due to the shortage of scrap metal and the limited capacity of domestic manufacturers.