Big-box Intermodal Spurs Greenbrier Railcar Orders

Railcar and barge builder Greenbrier Companies took orders valued at $130 million to build new railcars and modify older ones, mostly to meet still-growing demand for high capacity domestic intermodal equipment.

The orders are some of the best news in 2010 for rail equipment suppliers, who are facing their weakest year yet of the recession as many of North America's railcars remain idled on track sidings and in rail yards. Until fleet owners activate or scrap more of their parked cars, they are not ordering many new ones.

But this year's sharp rebound for intermodal service has already tightened the availability of containers, especially 53-foot domestic boxes that are the largest in service. A number of intermodal providers, including Hub Group and Union Pacific Railroad, had thousands of new 53-ft. boxes built overseas.

By The Numbers: Freight Cars in Storage.

Those are now joining their fleets, in time for the normal autumn peak period for domestic box moves on railroads. Now, Greenbrier's orders show that railcar fleet owners also need more double-stack well cars to carry those 53-ft. containers.

Greenbrier and other car builders have already been modifying older car types to bring them out of storage and meet current demand, but railcar fleets have been slow to order altogether new intermodal platforms to be built. William A. Furman, Greenbrier's president and CEO, said "the recent orders for double-stack equipment represent the early signs of a restoration in demand for this car type."

Greenbrier also received orders for 700 covered hopper cars of the type used in grain service, but its new business is mainly driven by the need for 53-ft. intermodal cars. It will build more than 1,000 new double-stack cars, Greenbrier said, and refurbish 1,100 older and smaller well cars to expand them for 53-ft. service.

To meet the demand, Greenbrier will add 260 workers at its Gunderson rail plant in Portland, Ore., to bring the total employment there to 900, and will shift another 175 out of its sluggish barge business to railcar production.