The North American railcar and rail equipment manufacturing industry is keeping its eye on what’s happening in Ukraine and Russia since many companies deal with customers or have facilities in or near the region.
“Historically the railway supply industry has been concentrated in North America, however, many equipment manufacturers have been feeling the effects of broader supply chain challenges that predated this crisis,” said John Hebert, spokesman for the Railway Supply Institute. “We are currently working with our members to identify and address impacts from the sanctions.”
Indeed, the conflict is set to test the supply chain resiliency of Europe, according to Jack Isselmann, spokesman for railcar manufacturer Greenbrier (NYSE: GBX). However, the supply chain has also had practice in gaining resiliency after two years of the COVID-19 pandemic, he said.
Although Greenbrier’s European operations aren’t directly reliant on supply inputs from Ukraine and Russia, meaning they have a lower exposure risk, the conflict could strain the broader supply chain and the global economy, Isselmann said.
“We’re working very hard to make sure we have supply chain resilience under the circumstances,” he said.
Greenbrier has facilities in Poland and Romania that serve the European market, and the company will be watching for ways to respond to any humanitarian needs there as the crisis continues and refugees spill over to neighboring countries. Greenbrier has also contributed to a U.N. crisis relief fund in support of Ukraine and has urged its employees to consider contributing as well.
“I think the most important thing on this topic is that we have a number of individuals of Ukrainian heritage who work at Greenbrier, both in Europe and in the Americas. And our thoughts and our prayers and our hearts are with them and their families,” Isselmann said.
Ensuring employees’ safety is a top concern for rail equipment and locomotive manufacturer Wabtec (NYSE: WAB), which operates in Russia.
“We are deeply concerned over the events and 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 all we can to assist them in this time of need.”
Another key facet of the Ukraine-Russia situation is the global energy supply and how the U.S. will meet its own energy needs while also seeking opportunities for export.
“If Europe ends up facing an even bigger energy crisis as a result of this, we should be looking at how the United States can increase exports to help mitigate shortages in Europe. As part of that, we’ll also be urging the Biden administration to reconsider its decision to suspend the safe transportation of liquefied natural gas by rail to help expand our export capacity of LNG,” Hebert said.
North American companies GATX (NYSE: GATX) didn’t return a request for comment, but it also operates in Russia.
GATX’s international arm includes railcar leasing and business in Russia, Europe and India. At the end of 2020, GATX Russia owned 380 railcars, with a customer base in timber, forest products and the chemical sectors, according to GATX’s 2020 annual report. GATX also has a maintenance facility in Poland.
“There’s a lot of unknowns right now. We are well positioned. We’re well resourced right now. At this stage, our production schedules have not seen an impact. But we’re like the rest of the world and are watching the situation very closely,” Isselmann said.
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