Difficulties in the US railcar leasing market saw third quarter net income almost halve at global specialist GATX Corporation, down from $95.7 million in the third quarter of 2016 to $49 million currently.
Year-to-date 2017 net income was $159.9 million, compared to $226.2 million in the prior year period.
Brian Kenney, president and chief executive officer of GATX, said: “Challenging conditions continue in the North American railcar leasing market due to the oversupply of existing railcars and a large railcar manufacturing backlog.”
In the third quarter, the renewal lease rate change of GATX’s Lease Price Index was a negative 27%, the average renewal term was 35 months, and its renewal success rate was 74.9%. GATX’s fleet utilization decreased slightly to 98.5% in the quarter.
Utilization at GATX Rail Europe remains stable at 95.6%.
Kenney concluded: “Our year-to-date fleet performance in North American Rail has exceeded our expectations due to the excellent performance of our commercial team in keeping cars on lease despite the difficult market. GATX International and American Steamship have also performed ahead of expectations due to stronger short-term demand than anticipated.”