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The railcar leasing market in North America is estimated to grow at a CAGR of 6.76% between 2022 and 2027. The size of the market is forecast to increase by USD 5,158.8 million. The growth of the market depends on several factors, including increasing demand for tank cars due to growing crude oil production, increasing expansion of the railway network, and efficiency and reliability of rail over road transport.
This report extensively covers market segmentation by product (freight cars, tank cars, and locomotives) and end-user (petroleum and chemical, coal, agricultural products, and others). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The efficiency and reliability of rail over road transport are notably driving the market growth, although factors such as risks associated with railcar leasing may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Key Railcar Leasing Market in North America Driver
The efficiency and reliability of rail over road transport are notably driving the market growth. The transportation of goods through rail tracks helps reduce traffic congestion and carbon emission to a large extent. The rail network enables the customer to ensure the delivery of the product on time, owing to the structure networks and proper schedules for arrivals and departures. Most railway cargo transport ensures the timely delivery of the cargo, while the delivery gets delayed via road transport due to traffic congestion and other unpredictable issues like accidents on the road.
Additionally, rail transport is cheaper compared with road transport, which attracts many manufacturing companies to use cargo trains instead of road transport. For instance, products such as oil, gas, cement, chemicals, and other large-volume goods are mostly transported using freight cars instead of trucks due to the low cost of transportation and reliability of the mode of transportation. Hence, the increased efficiency and reliability of rail over road transport is one of the major factors driving the use of rail networks for cargo transports, which in turn, will drive the growth of the railcar leasing market during the forecast period.
Significant Railcar Leasing Market in North America Trend
The application of advanced coatings on railcars is an emerging trend in the market. Railcars are highly prone to wear and tear owing to long-term usage. They are highly prone to deterioration due to various reasons, such as a reaction between the railcar and the content and weather changes. There are various types of coatings that are used to eliminate such damage, such as sulfuric acid, epoxy coatings, and phenolic coatings.
The coatings that are used on these railcars should be certified by the Food and Drug Administration (FDA) and National Science Foundation (NSF). Tank cars are highly prone to such deteriorations, as they carry crude oil and its various derivatives. These compounds easily react with metal and will cause wear and tear. Also, normal coatings are not possible in tank cars, owing to their cylindrical shape leading to uneven coatings. In such cases, high solid coatings are used to protect the railcars from volatile organic compounds and hazardous air pollutants. Hence, the application of advanced coatings can increase their lifespan, thereby, driving the market growth during the forecast period.
Major Railcar Leasing Market in North America Challenge
The risks associated with railcar leasing are major challenges impeding market growth. The technological advances and the declining residual value of the railcars are the major risks associated with railcar leasing. The leasing term of the railcars is dependent on the operators, and it is usually for a small period of time. With the technological upgradation in the market, new and more efficient upgraded version of railcars are being introduced in the market, which will outdate the older version of railcar after the lease period.
Additionally, the residual value of the railcar reduces proportionally with the number of times the railcar is being leased. The railcars that have been used for a longer duration will have less market value for leasing compared with the new ones launched in the market each year. Furthermore, the tank cars that have been used for the transportation of chemicals, crude oil, and petroleum products will have severe damage, which reduces the value of the railcar, as well as incurs huge losses for the leasers, along with other maintenance costs. Thus, the risks associated with railcar leasing can hinder the growth of the market during the forecast period.
Key Railcar Leasing Market in North America Customer Landscape
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Railcar Leasing Market in North America Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
HiRail Leasing - The company offers road and rail fleet sales, rentals, and leasing services. The key offerings of the company include short-term, long-term, and lease-to-own railcar leasing services.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the freight cars segment will be significant during the forecast period. Freight cars are used for the transportation of goods such as coal products, forest products, metals and minerals, and agricultural products.
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The freight cars segment was valued at USD 4,094.32 million in 2017 and continued to grow until 2021. The freight car manufacturing companies are highly focused on redesigning the freight cars to increase the capacity of the container, thereby enhancing the efficiency of transportation in a single trip. This has increased the demand for new freight cars by various end-user industries. Also, there is an increase in constant technological upgrades in the market, which, in turn, will drive the market in North America. The freight cars include open cars, box cars, flat cars, and sliding wall freight cars. The type of freight cars is decided based on the material that needs to be transported. There are other freight cars, such as covered hoppers, which are mainly used for the transportation of cement, frac sand, and coal. The demand for covered hoppers is high in North America, owing to the increased demand for cement and sand due to the rise in construction activities. Therefore, such factors will boost the segment growth of the market during the forecast period.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
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Railcar Leasing Market in North America Scope |
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Report Coverage |
Details |
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Page number |
155 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 6.76% |
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Market growth 2023-2027 |
USD 5,158.8 million |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
6.58 |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
American Industrial Transport Inc., Arrendadora Nacional de Carros de Ferrocarril S.A. de C.V., Berkshire Hathaway Inc., Everest Railcar Services Inc., First Citizens Bancshares Inc., GATX Corp., GLNX Corp., Herzog Contracting Corp., HiRail Leasing, Mitsui and Co. Ltd., Nucor Corp., PFL Petroleum Services LTD., RESIDCO, RTEX Rail, Sasser Family Companies, Stonebriar Commercial Finance, Sumitomo Mitsui Financial Group Inc., Trinity Industries Inc., VTG GmbH, and Wells Fargo and Co. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Product
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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