Railcars Leasing Market Projected to Experience Major Revenue Boost during the Period between 2019 and 2029

Posted on 2019-10-29 by Mark Hub in Automotive // 0 Comments

Research and Development Initiatives towards Innovative Freight Wagons Will Boost the Growth of Railcar Leasing Market: A well strategized collaboration in April 2019 between DB Cargo, one of the largest rail freight companies of Europe and VTG a rolling stock leasing company has helped pioneer research that is aimed at introducing cost-efficient and energy efficient freight wagons that are set to transform the railcar leasing market. The research primarily focused on components that were not only lightweight but also time and energy saving. Digitization that enhanced the operational capability of these wagons and optimization of dispatch were the key result areas the two rail freight giants focused on. The results of the research done revealed that the new wagons consumed 3% -8% less traction energy and also lowered noise and lifecycle costs. These newly developed wagons will be added to the railcar leasing portfolio giving a stunning impetus to the growth of the railcar leasing market. Such innovations aim at reducing energy consumption, noise and cost.

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Intelligent Railcars Will Digitalize Freight Operations, Thus Bolstering the Railcar Leasing Market

The digital freight train will encompass IoT to digitalize all railcar operations. These intelligent railcars will be well connected to the entire multimodal supply chain. With the help of a wireless digital network, these new trains will offer a plethora of benefits to the railcar leasing market. Features such as digital assistance for loading and unloading, freight car management, consignment states and arrival notification will help to propel the railcar leasing market towards better and more effective asset management. Another giant leap has been manifested in tank container technology thanks to the joint venture-ship of two chemical heavyweights namely BASF and Belgian manufacturer Van Hool. The two companies have put their head together to champion tank containers that can be transported along with railcars. With an astonishing payload of approximately 66 metric tons, these new tank containers can be made mobile on any kind of railway track and also stacked on top of one another for better and more efficient storage. It is evident that such disruptive trends are not likely to abate anytime soon and are striving to enhance the efficiency, connectivity and performance of the railcar leasing market.

North American Railcar Leasing Market to Get a Jumpstart as Investing Throws Back Attractive Returns

The North American railcar leasing market is witnessing transition as more than 1.5 million railcars are seen chugging through its vast landscapes. With the market brimming with unlimited possibilities, this is perhaps the right time to be jumping onboard the investing bandwagon as the railcar leasing market is rife with potential. Investors opine that if done right, railcar leasing can offer returns up to 10% with a distinct possibility of hitting the high teens. This is primarily due to the minimal upkeep of railcars which do not require a significant amount of cosmetic maintenance. Key players are making full use of this sizeable opportunity and entering into significant partnerships with railcar manufacturers to manage and lease out fleets. For instance, Napier Park Global Capital has entered into a joint partnership with Trinity Industries Leasing Company thus proliferating this new trend. Napier Park helps out Trinity by leasing out its railcars to buyers for a minimum term of 5 to 6 years. Railcar leasing is seen as an exceptionally attractive asset as they are critical to perform all functionalities of the supply chain. The high utility value of railcars makes it attractive to manufacturers as well as industrial and agricultural firms as they all receive their raw materials in bulk form. Railcar leasing helps to keep the prices muted thus giving the railcar leasing market some stability. Since railcars are one of the easiest and most efficient way of transporting goods the industry will propel ahead.

Administrative Burdens and Financial Issues Could Impede the Growth of the Railcar Leasing Market

Fleet management of railcars whether leased or privately owned is tedious, onerous and time consuming. Railcars require periodical maintenance within the prescribed safety rules. Cash flow requirements for railcar leasing is an intricate process and often manufacturers who are new to shipping by rail must seek help from experts to flawlessly negotiate through the financial process. Besides having fleet sizing and purchase timing issues, railcars are also exorbitant in cost. Railcar leasing market is backed by strict regulations and legislations in the enforcement of its contracts which are highly in favor of the lessor. The mobility of railcars from one place to another entails the payment of car miles and switching fee besides the storage fee for undelivered goods. These factors combined could pose some serious restraints on the growth of the railcar leasing market.

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Containerization to Boost the Growth of the Railcar Leasing Market

The growing need for carrying petrochemicals and gases will give an upsurge to the demand for railcar leasing boxes. Petrochemicals and gases is expected to incur the highest revenue growth over the forecast period. Moreover, the applications of railcar leasing has expanded to the food and beverage industry where it is seeing prolific growth. The diversified food products portfolio that are being transferred and shipped through containers are creating lucrative opportunities for the growth of the market. Flatcars, Gondolas and Boxcars are the different types of railcars that are being used to ship oil, lumber and coal products and this is expected to rev up the demand for railcar leasing over the forecast period.

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