As many as 200,000 railcars could be retired over the next few years — and that dynamic, rather than any single traffic report, is the real story shaping the railcar market. Charley Moore, chief commercial officer at TrinityRail, joined FreightWaves Today to explain what rising retirements, high lease fleet utilization and delayed build decisions mean for shippers and the broader rail industry, with Trains magazine editor Bill Stephens also on the panel.

Roughly 200,000 railcars are approaching end-of-life across North America, setting up a significant replacement demand cycle that will pressure an already tight market, according to Moore. Lease fleet utilization across public lessors is running “in the high 90s,” he said — a figure that underscores how little slack remains in the 1.6 million-car North American fleet. Railcars typically have service lives measured in decades, and replacement cycles of this scale historically ripple through manufacturers, lessors and repair shops for years, since new builds can only absorb a portion of retirements at current production rates.

The supply squeeze comes against a manufacturing trough. Moore said the industry expects to build approximately 25,000 railcars in 2026, held back partly by tariff uncertainty and higher steel input costs that have delayed customer capital decisions. He projects builds climbing to 30,000–35,000 units in 2027 as structural demand recovers. Trinity itself operates more than 140,000 railcars on lease and maintains manufacturing facilities in the United States and Mexico, including plants in Longview and Fort Worth, Texas. Annual builds in the mid-20,000s remain well below the industry's historical peak years, a gap that lengthens how long it takes to replace a 200,000-car retirement wave.

On the traffic side, Association of American Railroads data for Week 34 showed North American carloads up 1.7% year over year, intermodal units up 6%, and total traffic up 3.9% — matching the prior four-week trend exactly. U.S.-only figures were slightly stronger: carloads up 2.2%, intermodal up 5.7%, and total traffic up 4.1%. Stripping out coal and grain, U.S. carloads rose 1.5%, a reading Stephens said reflects genuine strength in the underlying industrial economy.

Moore pointed to geopolitical disruptions as key volume drivers. Grain disruptions tied to the Russia-Ukraine conflict have boosted U.S. export shipments, while instability involving Iran has lifted crude oil movements both domestically and for export. He also noted a resurgence in coal demand driven by electricity consumption from AI-related data centers, a trend Stephens corroborated, citing recent announcements in Pennsylvania where coal-fired power plants slated for closure received life extensions due to rising power demand.

“If you think about post-announcement when UP and NS came out and said, hey, we’re going to merge, some things that happened — BNSF and CSX showed more lanes and improved service into different transcon markets. The CN and CSX provided a new service into Nashville. UP and CN recently came out with announcements about alignments. There’s better service into Mexico,” Moore said.

Moore said eliminating an interchange in a potential Union Pacific–Norfolk Southern merger could cut transit times by 24 to 48 hours, though he acknowledged the Surface Transportation Board will need to address rate concerns for single-railroad captive shippers. The STB, the federal regulator that reviews railroad mergers, has historically conditioned approvals on protections for shippers that would lose rail-to-rail competition, a precedent that shapes expectations for how any transcontinental combination would be reviewed. Trinity has said publicly it is “pro-growth,” whether that comes through a merger, greater railroad alignment, or improved service. Moore added that any shift of freight volume to rail creates downstream demand for more railcars.

On tariffs and steel costs, Moore said higher input prices have increased the cost of new railcars and slowed order decisions, while uncertainty around the application of Section 232 duties to railcars crossing the U.S.-Mexico border remains unresolved. Section 232 is the trade statute the U.S. government has used to impose tariffs on steel imports, and how it applies to finished goods assembled in Mexico from cross-border supply chains has been a recurring point of dispute for manufacturers. Trinity’s position is that its Mexico-produced cars qualify under USMCA, and the company is actively engaging U.S. Customs and Border Protection. Moore noted that elevated new-car prices are simultaneously creating lease rate headroom — a key tailwind for Trinity’s leasing business as the company works to offset manufacturing cost pressures through automation, domestic sourcing shifts, and supplier negotiations heading into an anticipated 2027 demand upturn.

For shippers that move freight by rail, lease equipment, or watch intermodal capacity, the combination of pending retirements, tight fleet utilization and constrained new builds is the setup to track into 2027. This article is based on a transcription of the FreightWaves Today interview.