Russian Freight Car Leasing Market Reviving

Russian freight car leasing market is recovering after three years of decline, the Kommersant reports.

In 2016 Russia manufactured 36,600 freight cars. United Wagon Company (UniWagon) ranks first in freight car manufacture - it produced 15,800 freight cars in 2016. Out of 23,500 gondola cars 13,000 were made by UniWagon. Therefore, the company holds 43% of the freight car market and 55% of the gondola manufacture market.

Prior to economic and political crisis Ukraine exported about 50% of its new freight cars to Russia. Today only Russian manufacturers produce rolling stock for Russia. Core consumers are now freight car operators. Captive companies stepped back now.

“Due to our economics specifics - raw material and export-oriented - gondola and tank cars are most popular freight cars in Russia”, entrepreneur Artur Nurmukhamedov says. Thus tank cars carry oil and oil products while gondolas deal with construction, mining and coal freight.

Leasing is now the key format of the freight car acquisition. Due to the three-year crisis the leasing rates dropped dramatically. Some lessors ceased servicing financial leasing and forwarded the cars to operational lease.

Drop of the freight car excess to historic minimum was another factor for freight car leasing increase. Coupled with the fleet write off (212,000 gondola cars were scrapped in 2015 - 2016), it helped balancing the situation with freight car availability.