GLGi: Rail Industry Forecast

Toby Kolstad

Council Member Biography

Toby Kolstad is President of Rail Theory Forecasts, a firm providing consulting and forecasting services in North American rail freight traffic and railcar demand. Mr. Kolstad has more than 35 years of experience in the railroad industry. He also has experience in managing railroad operations. Prior, Mr. Kolstad was Vice President at Greenbrier Leasing, Director of Car Management at The Denver and Rio Grande Railroad, and General Superintendent for the Illinois Central RR. He holds a BS in Mechanical Engineering from Tulane University, an MS in Applied Mathematics from the California Institute of Technology, and an MBA in Operations Research from the University of Chicago.

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Rail Theory Forecasts

Rail TrendsProgressive Railroading

New York CityOctober 3, 2007

New Railcar Deliveries

Factors Affecting New Railcar Demand

• Growth in rail traffic

• Railroad operating efficiencies

• Popular new railcar designs

• Rate of replacement of old cars

Railroad Traffic Growth

Railroad Operating Efficiencies

Popular Car Introductions

• Double-stack Intermodal Cars 1985

• 73’ Center-beam Flatcars 1988

• 286k Aluminum Coal Cars 1994

Railcar Replacements

• 1995----50 year service life approved by AAR for all railcars built after July, 1974

• 2006----65 year service life approved by FRA & AAR for selected car types

Coal Cars

Coal Car Deliveries

Annual Change in Coal Production (%)

Coal Train Speeds

Coal Car Fleet Age ProfileJuly 2006

Flat Cars

New Flatcar Deliveries

Intermodal Traffic Growth

Growth of TEU Imports on West Coast

Growth of U.S. Softwood Lumber Production

Flatcar Fleet Age ProfileJuly 2006

Tank Cars

New Tank Car Deliveries

Ethanol Production (million gallons)

Domestic Ethanol Supply/Demand1000 gallons

Disposition of Corn Cropmillion bu.

Covered Hopper Cars

New Covered Hopper Deliveries

Traffic Growth Rates

Covered Hopper Fleet Age ProfileJuly 2006

Railcar Builder Estimates2007

Estimated Production in 2007

American Railcar

Trinity Industries

Greenbrier Freight Car America

Union Tank

Nat’l Steel

ARII TRN GBX RAIL

Boxcars 62 62

Gondola Cars

400 800 800 2,000

Coal Cars 3,250 9,750 13,000

Flatcars 595 1,200 255 2,050

Intermodal 4,000 200 4,000

Covered Hop 4,095 14,600 1,305 20,000

Tank Cars 4,180 7,920 9,900 22,000

Total 8,275 26,765 7,167 9,750 9,900 1,255 63,112

Railcar Builder Estimates2008

Estimated Production in 2007

American Railcar

Trinity Industries

Greenbrier Freight Car America

Union Tank

Nat’l Steel

ARII TRN GBX RAIL

Boxcars 0

Gondola Cars 500 500 1,000

Coal Cars 2,250 6,750 9,000

Flatcars 525 750 1,500

Intermodal 3,800 200 4,000

Covered Hop 2,550 8,000 450 225 11,000

Tank Cars 3,990 7,560 9,450 21,000

Total 6,540 18,835 5,000 6,750 9,450 925 47,500

Rail Theory Forecasts

Rail TrendsProgressive Railroading

New York CityOctober 3, 2007