Railroad Car Rental and Leasing in the US Industry Market Research Report Now Available from IBISWorld

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After difficult recessionary years, the industry finally began recovering on the back of rebounding demand from mining, trade and industrial production; over the next five years, a return to stronger demand from downstream industries will boost the industry's performance. For these reasons, industry research firm IBISWorld has added a report on the Railroad Car Rental and Leasing industry to its growing industry report collection.

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Recovering demand from mining, agriculture and industrial production will boost growth

The financial performance of the Railroad Car Rental and Leasing industry is subject to the trends and activity in several downstream industries, including agriculture, mining, construction, energy and logging. General economic conditions, such as interest rates, unemployment and disposable income, also play an important role in determining demand for the industry's services. “As such, demand for railroad car rental and leasing services derailed in the five years to 2013 due to the recession and the struggling US construction and manufacturing markets,” says IBISWorld industry analyst Agiimaa Kruchkin. IBISWorld expects that revenue will decline at an average annual rate of 1.4% to $2.3 billion during the five years to 2013.

Conditions were tough overall from 2008 to 2010, although the recession aided the Railroad Car Rental and Leasing industry to an extent due to tight capital conditions, namely because the downstream users of railroad cars resorted to renting and leasing instead of buying. Nevertheless, revenue plunged 11.8% and 4.0% in 2009 and 2010, respectively. “In 2011, the industry finally began recovering on the back of rebounding demand from mining, trade and industrial production,” adds Kruchkin. “Because access to capital remains challenging, many downstream customers have turned to rental firms as their only option, especially after being denied financing.” Continuing this trend, revenue is expected to rise 4.3% in 2013.

The industry has a low to medium level of market share concentration; a vast number of smaller players that operate in geographically dispersed or specialist markets generate the majority of industry revenue. The industry has three major players with significant market share: Trinity Industries, General Electric and CIT Group. Most firms operate one or two rental locations, while larger companies operate on a national level with hundreds of locations across the country. The fragmented structure of the industry is evident in the annual survey for County Business Patterns. The survey indicates that only about 1.0% of establishments employ more than 100 people. On the other hand, about 44.0% of establishments employ fewer than five people.

Over the five years to 2018, a return to stronger demand from mining, agriculture and industrial production will boost the industry's performance. In addition, the Rail Transportation industry is expected to become a key player in the transportation of crude oil. This development, in turn, will drive demand for railroad car rental and leasing. IBISWorld forecasts that industry revenue will increase through 2018. Profitability is expected to follow suit: After suffering a significant drop-off in demand and an increase in price competition, average profit margins are forecast to recover as demand for railroad car rental and leasing services stabilizes. Growth in enterprise, establishment and employment numbers, however, is expected to trail behind revenue. For more information, visit IBISWorld’s Railroad Car Rental and Leasing in the US industry report page.

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IBISWorld industry Report Key Topics

Firms operating in this industry rent or lease railroad cars to customers who move freight across railroads. Renting or leasing railcars allows downstream customers to avoid incurring the capital costs of purchasing a railcar from a manufacturer.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.

Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
IBISWorld
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