Coal Railcar Market

Implications:     The commentary section discusses the current market and outlook for coal railcars

Analysis:              Below are the high points regarding the coal railcar market:               

    *The CSX and NS Railroads have been active in the railcar lease and purchase market the last several months as a result of the dramatic increase in U.S. coal exports.  Coal exports in 2007 were 59.3 million tons compared to the forecasted 80 to 83 million tons in 2008.  The primary increase is Eastern coal traveling on these two railroads to the five coast terminals.  This has worked off much of the excess coal railcars in the lease market.               

    *FreightCar America has been facing aggressive competition from Trinity on coal railcars.  This has taken market share from FreightCar America.
 
    *American Railcar Industries recently announced it is now manufacturing coal railcars.  This is another competitor to FreightCar America.
 
     *Aggressive pricing amongst the railcar manufacturers is compressing margins.
 
     *Only six new coal-fired power plants are scheduled to come on-line in 2009.