Investors predict rising business in rail freight
Railcar manufacturing and leasing firms see rising demand, Amergin and Greenbrier say
In a bet on the growth of rail freight, investors are buying up railcars, according to new deals announced this week by the aircraft, rail, and transportation equipment leasing company Amergin Asset Management and by the freight railcar manufacturer The Greenbrier Companies Inc.
Greenbrier today said it had received orders for 15,300 new railcars with an aggregate value of $1.9 billion during its fiscal fourth quarter ended on August 31, marking its highest cache of quarterly orders in nearly a decade.
Lake Oswego, Oregon-based Greenbrier cited broad demand across all railcar types. "The diverse range of orders across railcar types exceeded Greenbrier's expectations for the quarter. It also indicates Greenbrier's strength in our North American and European markets,” Brian J. Comstock, Greenbrier’s EVP Chief Commercial and Leasing Officer, said in a release. “Order levels are distinct from the high demand seen during the crude-by-rail era of the 2010s. Today, one or two railcar types are not powering the market. Although railcar loadings are not fully back at pre-pandemic levels, we believe that growth in key commodity markets will keep railcar demand steady and above replacement levels in future periods."
That announcement came just a day after Amergin said it had acquired PNC Bank's operating railcar portfolio, including more than 6,000 railcars.
The railcars are under lease to a variety of companies across the U.S., in accordance with Amergin Rail’s model of leasing the equipment the Class I, II, and III railroads, rail shippers, financial institutions, and operating lessors. "This acquisition is consistent with our goal of acquiring attractive transportation assets that will deliver stable risk-adjusted returns for our investors," Amergin CEO Mark McGreenery said in a release.
Terms of the deal were not disclosed. Boca Raton, Florida-based Amergin was founded in 2022 and is backed by Blue Owl Capital Inc., a financing company that provides direct lending solutions to U.S. middle-market companies.