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Railroad Industry Executives Optimistic for 2012

February 09, 2012, 07:30 AM
Filed Under: Rail Transportation
Related: Rail, Railcars, Railroad

Progressive Railroading reported that in a survey of more than sixty executives in the railroad industry, in general, executives feel good about the year ahead despite the challenges facing the economy and industry.

To follow are excerpts of executive comments  from this exclusive report which can be read on Progressive Railroading:

• "The coming year looks good, as the North American railroads and fleet operators continue to lease more of their rolling stock needs."

• "From the lessor's perspective, purchase prices for new cars cannot be supported by prevailing lease rates unless dangerously high residual assumptions and/or unrealistic remarketing potential is factored into the economic equation. The rapidly changing regulatory and car design environment challenge the traditional belief that cars will be marketable for 50 years."

• "The impact from new accounting rules on leased-in equipment is one of the biggest issues that leasing companies are facing. Another is the high cost of new rail equipment and the difficulty in getting lease rates that justify the
higher investment costs."

• "Tighter credit process and more scrutiny of transactions. Some traditional lenders have stopped funding new transactions."

• "We expect investment spending on railways to be slightly improved from 2011 on account of modest economic growth leading to continued higher traffic levels. This should re-assure investors of the feasibility of investment plans."

Source: Progressive Railroading

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