Key Takeaways
- Technology, especially real‑time data, AI, and machine learning, is now the core driver of safety, efficiency, and resiliency in North American railroading.
- Norfolk Southern’s integration of systems such as PTC, ATGMS, digital train inspection portals, and AI‑based predictive maintenance is creating a model for a multimodal, data‑centric supply chain.
- The railcar leasing market remains strong, with rising loadings across most commodity groups, declining stored‑car inventories, and firm lease rates that reflect tightening supply‑demand dynamics.
- Specific car‑type trends show strength in covered hoppers (grain, sand/cement), tank cars (chemicals), and mill gondolas, while boxcars and centerbeam flatcars continue to face soft demand.
- Industry veterans like Bob Pickel exemplify the blend of technical expertise, customer focus, and optimism that has long supported the rail leasing and finance community.
Technology as the Cornerstone of Modern Railroading
Former Norfolk Southern Vice President Enterprise Resources Felismina (Mina) de Oliveira emphasizes that, after moving freight, technology is the most important element of railroading today. She explains that unlocking value hinges on how NS integrates near‑real‑time data into business processes to transform the entire supply‑chain ecosystem. Her background—spanning CN, vessel logistics, renewable‑energy trading, and two years at NS—gives her a broad view of how technology has evolved from mechanical innovations (dynamic brakes, distributed power, hot‑box detectors) to sophisticated digital solutions such as centralized dispatch, crew management, digital twins, onboard energy management, automated track inspection, Positive Train Control (PTC), and digital train inspection portals.
From Mechanical Advances to Data‑Driven Intelligence
De Oliveira notes that the past half‑century of technological evolution has produced a constant stream of data linking field operations with back‑office systems. Early technologies improved safety and network visibility; later systems enabled proactive and predictive maintenance by identifying rail or wheel defects before failure. The 2020 nationwide rollout of PTC added automatic train‑movement controls, generating scalable real‑time operating data. As machine learning (ML) and artificial intelligence (AI) matured over the last decade, railroads have begun to harness these tools to anticipate infrastructure and rolling‑stock failures, optimize rerouting, and reduce costly network disruptions caused by linearity‑related bottlenecks.
Leveraging Data for Service Consistency and Predictability
According to de Oliveira, the surge in data availability allows railroads to centralize customer service functions, focusing on consistency, stability, and predictability. NS uses integrated data to streamline service‑related interactions, aiming to deliver high‑level performance even when external shocks—natural disasters, pandemics, trade disruptions—become the norm. She stresses that supply‑chain resiliency depends on accurate, reliable data shared across customers, regulators, suppliers, and other railroads, making the weakest link a collective concern.
PSR 2.0 and the Path to a Supply‑Chain Revolution
The PSR 2.0 initiative, spearheaded by former NS EVP and COO John Orr (Railway Age’s 2026 Railroader of the Year), represents a 26‑month transformation that embedded these data‑centric principles at NS. De Oliveira views PSR 2.0 as merely the beginning; combining fifty years of technological progress with the past decade’s real‑time data capabilities, ML, and AI can ignite a supply‑chain revolution where safety, resiliency, and predictability become shared goals. The differentiator, she argues, lies in the depth of technology and data enablement across railroads, customers, and ports, fostering a continuous‑improvement mindset and the flexibility to predict or recover from disruptions.
Beyond Rail‑Centric Data: Multimodal Integration
A critical insight from de Oliveira is that the safety and efficiency gains achieved internally must extend outward. While organizational improvements have set new standards, the industry now stands at a crossroads between internal operational goals and external supply‑chain objectives. To succeed, NS must leverage economies of scale, ensuring that interactions with customers are successful and that service consistency is protected. This requires moving from a transactional supplier/customer relationship to a true partnership enabled by technology and the exchange of relevant operational data.
AI’s Expanding Role in Optimization and Resiliency
Looking ahead, de Oliveira identifies AI as a forthcoming field of engagement. Railroads can use AI to improve the accuracy of proactive failure predictions for infrastructure and rolling stock, optimize rerouting to avoid disruptions, and develop multimodal resiliency options through data exchange and collaborative partnerships. AI‑driven weather analytics, for instance, allow NS to anticipate natural‑disaster impacts, prepare in advance, and recover quickly—directly supporting customers’ own supply‑chain resilience efforts.
Safety Technologies: ATGMS and Digital Train Inspection Portals
Safety remains the first step toward a consistent and resilient railroad. NS leads the industry by deploying Automated Track Geometry Measurement Systems (ATGMS) on 26 locomotives, which continuously assess track condition while moving freight. Parallel efforts with Georgia Tech have produced Digital Train Inspection (DTI) portals that capture thousands of photos of railcars at track speed, delivering real‑time defect alerts reviewed 24/7 to trigger immediate actions such as stopping a train or setting out a car. These innovations provide consistent, reliable, and predictable service—core to the transportation ecosystem.
Leasing and Finance Market Shows Continued Strength
Shifting focus to the equipment‑leasing arena, the railcar lease market demonstrates sustained strength and stability. U.S. loadings rose 3.4% year‑over‑year (2.9% North America‑wide), while intermodal volumes increased 0.9%. Growth is broad‑based, touching grain, farm products, chemicals, metals, and even coal, which remains steady relative to 2025 levels.
Investor interest remains robust, fueled partly by speculation around the UP/NS merger and activity in the secondary market for railcars. Although new‑order volumes are modest—1Q26 orders totaled 5,654 units, projecting 20,000‑25,000 cars for the year—the declining number of cars in storage (down more than 10% since 4Q25) suggests the North American fleet is approaching maximum capacity. From an investor perspective, scarcity translates into higher valuations and attractive returns, especially amid tariff uncertainty, geopolitical tensions (e.g., the Iran conflict), inflation, and potential interest‑rate declines.
Market Segment Overview: Where Rates Are Holding or Shifting
Lease‑rate stability is the headline across most car types, with tightening demand nudging rates upward in several segments.
- Covered Hoppers – Sand and Cement: Rates remain in the low‑$200s net and mid‑ to high‑$200s full‑service (FS), with modest growth expected as cars come off initial leases.
- Covered Hoppers – Plastics: Softness persists, linked to feedstock costs and export reliance; jumbos (6,200 cf) command high‑$400s net / high‑$500s FS, while smaller cars (5,800 cf) sit in mid‑$400s FS.
- Covered Hoppers – Grain: Strong demand drives rates to high‑$300s/low‑$400s FS for 4,750 cf cars and high‑$400s/low‑$500s FS for larger units; new‑car orders may push low‑$600s FS.
- Tank Cars – Chemicals: Steady growth keeps DOT 111s in the mid‑$500s to mid‑$600s range; 117Rs fetch high‑$800s to low‑$900s; existing 117Js trade in the mid‑ to high‑$1,000s; standard 112J pressure cars hold around mid‑$900s, with upward drift anticipated.
- Mill Gondolas: After a period of tepid availability, rates have rebounded: older 52‑foot cars at high‑$300s/low‑$400s FS, newer models at high‑$500s/low‑$600s FS, and new builds expected to reach the $700s (net).
- Boxcars: The market remains lackluster but not dormant; 50‑ and 60‑foot cars range from high‑$500s to mid‑$600s FS, with 50‑foot cars slightly softer.
- Centerbeam Flatcars: Reflecting weak forest‑product demand, leases are scarce and often structured as per‑diem revenue‑sharing deals.
- Coal Cars: Despite low natural‑gas prices, coal‑related gondolas and hoppers are tight, yielding net rates in the low‑$300s; FS adds $150‑$200 depending on age, mileage, and service.
In Memoriam: Bob Pickel
The rail leasing and finance community also mourns the loss of Robert “Bob” Pickel, who passed away May 16, 2026, at age 71. Beginning his career with R.L. Banks and Associates in the 1970s, Bob transitioned to Conrail, then Southern Pacific, before entering the leasing sector with Flex Leasing Corporation in 1996. After Flex’s sale, he joined National Steel Car (NSC) in 2004, remaining there for two decades. A regular presenter at the Rail Equipment Finance Conference, Bob was known for his straightforward optimism, humor, and deep commitment to customer success. A Penn State graduate, he often concluded visits to campus with a stop at the Creamery—a nod to the birthplace of Ben & Jerry’s ice cream. His legacy blends a strong work ethic with a personable charm that left an indelible mark on friends and colleagues across the industry.
This synthesis captures the essential themes of the 2026 Guide to Equipment Leasing: the transformative power of technology and data in railroading, the prevailing strength and nuances of the railcar leasing market, and a tribute to an industry stalwart whose career exemplified the blend of expertise and optimism that drives the sector forward.