The US$ 679 million UK railcar leasing market is facing downward pressures, as COVID-19 induced sluggishness extends. UK is the second largest market for railcar leasing in Europe, with Germany firmly at the top. Although long-term outlook remains positive, railcar leasing companies have limited opportunities at their disposal, finds a new study by consulting firm Fact.MR.
Key Takeaways from the Study
- Surplus loading of railcar by lessors creating momentum in the industry
- Railcar leasing companies focusing on advanced technological deployment for effective tracking and management
- Light-weight and energy-efficient fright wagons a key focus area for over 50% of respondents in Fact.MR survey
- Cyclic recovery in coal production will create impetus for railcar leasing companies in long-term
- Sustained deregulation in Europe’s railway industry will boost market prospects
- PPP model will become more prominent in during the assessment period 2021-2031
- Boxcars are the most lucrative railcars in UK, with an estimated 23% share
- Hopper cars and gondolas are the other leading railcars in UK, with a market share of 19% and 16% respectively
- Transportation of petrochemical & gases accounts for bulk of revenues for railcar leasing companies.
- Industrial goods, agri, forestry, and F&B are the other end-use sectors for UK railcar leasing market
According to the study, demand for railcar leasing in UK will be determined to a great extent by how soon economic activity resumes, and at what scale. Contrary to China and South-east Asia, UK has been severely impacted by the COVID-19 crisis, which has prolonged the recovery.
The study further finds that most respondents were affirmative on leasing being a feasible option than buying. The average cost of a standard freight train was nearly $50,000; currently, it stands between $100,000 to $150,000. The increase in average costs has led to a greater preference for renting.
Integration of Sensors into Railcar Gaining Momentum Among UK Companies
Investment in integrated sensor technology continues to gain momentum, as railcar lessors focus on effective tracking. Use of integrated sensors in predictive maintenance is also gaining ground among UK railcar leasing providers. Fact.MR believes sensor integration to be a key focus area in the long run.
According to the Fact.MR study, the UK railcar leasing market is moderately fragmented. In its comprehensive study, Fact.MR has profiled the leading UK railcar leasing companies and their strategies.
The study further reveals that a majority of UK’s railcar leasing providers are focusing on strengthening their foothold in automotive component transportation.