Railcar lessor GATX sees a tightening market for freight cars, as utilization rises in its equipment fleet and lease renewal terms lengthen.
GATX, which also has non-rail assets, posted $19.9 million in net income for the first quarter, up 6.4 percent from the 2010 period. Revenue of $265 million was up 0.5 percent; most of that was rail lease income of $209.4 million, up 2 percent.
"As we expected entering 2011, rail market conditions continue to improve," said Brian A. Kenney, president and CEO. He said utilization of the company's 110,000-car owned fleet in North America increased to 97.8 percent at the end of March from 96 percent a year earlier.
That is in line with a shrinking level of idled railcars that car owners parked across the continent during the recession. "As the number of idle railcars in the industry continues to decline, our commercial team is focused on improving lease rates," Kenney said. GATX also ordered 12,500 new railcars in March, for delivery over five years.
The leasing firm cited continuing growth in freight rail traffic measures, along with the drawdown of idled railcars, as signs the equipment market is tightening.
Lease renewals in its fleet average 41 months in the latest quarter, GATX said, up from 36 months in the 2010 fourth quarter and 31 months in the 2010 first quarter.