The North American railcar and rail equipment manufacturing industry is keeping an eye on what’s happening in Ukraine and Russia because many companies do business with customers or have facilities in or near the region.
“Historically, the rail supply industry has been concentrated in North America, however, many equipment manufacturers have felt the effects of broader supply chain challenges that preceded this crisis,” said John Hebert, spokesman for the Rail Supply Institute. “We are currently working with our members to identify and address the impacts of the sanctions.”
In fact, the conflict is set to test the resilience of Europe’s supply chain, according to Jack Esselman, a spokesman for railcar maker Greenbrier (NYSE: GBX). However, he said the supply chain has also practiced gaining resilience two years into the COVID-19 pandemic.
Although Greenbrier’s European operations do not directly depend on supply inputs from Ukraine and Russia, meaning they have less risk of exposure, the conflict could strain the broader supply chain and global economy, Isselmann said.
“We are working hard to ensure that we have supply chain resilience under these circumstances,” he said.
Greenbrier has facilities in Poland and Romania serving the European market, and the company will monitor ways to respond to any humanitarian needs there as the crisis continues and refugees spill into neighboring countries. Greenbrier has also contributed to the United Nations Crisis Relief Fund to support Ukraine and urged its employees to consider contributing as well.
“I think the most important thing about this is that we have a number of individuals of Ukrainian heritage who work at Greenbrier, both in Europe and the Americas. Our thoughts, prayers and hearts are with them and their families,” Isselman said.
Ensuring employee safety is a top concern for rail and locomotive equipment manufacturer Wabtec (NYSE: WAB), which operates in Russia.
“We are deeply concerned about the events and acts of violence in Ukraine. Wabtec is closely monitoring the situation,” said Wabtec spokesman Tim Bader. “Our priority is to support our employees in the region. “We are doing everything we can to help them in this time of need.”
Another key aspect of the Ukrainian-Russian situation is global energy supplies and how the United States will meet its energy needs while also looking for export opportunities.
“If Europe ends up facing a larger energy crisis as a result, we should look at how the United States can increase exports to help alleviate shortages in Europe. As part of that, we will also urge the Biden administration to reconsider its decision to suspend safe transportation,” Hebert said. “LNG by rail to help expand our LNG export capacity.”
North American Companies GATX (NYSE: GATX) did not respond to a request for comment, but it also operates in Russia.
GATX’s international arm includes railcar leasing and rolling stock business in Russia, Europe and India. At the end of 2020, GATX Russia had 380 rolling stock, with a customer base in the timber, forest products and chemical sectors, according to GATX’s 2020 annual report. GATX also has a maintenance facility in Poland.
“There are a lot of unknowns right now. We are in a good position. We are well resourced now. At this point, our production schedules have not seen any impact. But we are like the rest of the world and are monitoring the situation closely,” Isselmann said.
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