John D. Boyd | Jul 26, 2011 11:51AM EDT
Railcar fleet leasing firm CIT Rail ordered 5,000 hopper and tank cars for about $475 million, with production to be split among “multiple manufacturers.”
These orders are the latest sign that rail-related industries see demand continuing for some key commodity cargoes, despite the lack of broader economic momentum.
The cars will mainly be delivered throughout 2012. CIT said they can be used by a range of industrial customers “including oil/natural gas drilling, renewable fuels, and agriculture, which are experiencing increased demand and contributing to the economic recovery.”
Some potential users of tank cars could be ethanol distillers, while the hoppers could carry their distilled dried grain byproduct that is in high demand as animal feed. And both the Marcellus Shale natural gas formation in the East and the Bakken Shale oil fields in the Great Plains and Canada are generating substantial demand for railcars to haul materials ranging frac sand and chemicals to unit trainloads of oil headed to refineries.
In a filing with the Securities and Exchange Commission, CIT said it placed the orders in June and July with three railcar builders. It already has lease commitments for roughly one-third of those newly ordered cars.
That is the second order this year for CIT, which has North America’s third-largest railcar lease fleet with over 100,000 units. It previously ordered 3,500 cars and took an option for another 1,750, and this latest 5,000 includes that option.
-- Contact John D. Boyd at jboyd@joc.com. Follow him on Twitter www.twitter.com/jboydjoc
