FreightCar America SWOT and PESTLE Analysis

Strength

1. The company manufactures various models of railcars and holds intellectual property for the same: FCA designs and manufactures a wide variety of freight cars including covered hoppers, gondolas, open top hoppers, intermodal and non-intermodal flat cars that transport numerous types of dry bulk and containerized freight products. In the last six years, the company has added 37 new or redesigned products to its portfolio, including various covered hopper car products. Some of the company’s main models are Versa Flood Hopper Cars, Covered Hopper Cars, DynaStack Series, Steel Product Cars, Boxcars and Aluminum Coal Cars. FCA also further develops the mentioned products to meet the characteristics of the materials being transported and customer specification. The company also provides redesigning and servicing for old freight cars. Additionally, FCA holds several US and international patents and pending applications, copyrights, trade names and registered trademarks. The company’s key patents include a one-piece center sill, railroad car tub and the hopper railcar with automatic individual door system.

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Weakness

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Opportunity

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Threat

1. Threat from close competitors in the industry: FreightCar America faces aggressive competition in all geographic markets and industry sectors in which it operates. In addition to price, the company faces competition in respect to product performance and technological innovation, quality, reliability of delivery, customer service, and other factors. The effects of this competition, which is often intense, could reduce revenues and operating profits, limit the ability to grow, increase pricing pressure on products, and otherwise affect FCA’s financial results. However, since barriers to entry for this industry are high, due to the need for large investments and expertise, the threat of new entrants is quite low. The main competition lies among existing competitors such as Trinity and National Steel Car Ltd. The companies also face downturns together, and lowered demand for products further instigates competition.

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Rail Car manufacturing plants use unsustainable energy, create pollution and emit carbons: Traditionally, rail car manufacturing is viewed as an extremely polluting, unsafe and hazardous process, which may be true for many manufacturers around the world. The manufacturing process includes release/discharge of certain harmful materials into the environment, the management, use, processing, handling, storage, transport and disposal of hazardous materials and significant contribution to carbon and GHG emissions due to residue/smoke and high energy use. Freight Car America Inc. has taken several steps to sidetrack from this general view and shift towards sustainability. The company scouted for a new freight car production facility and transformed it to be an energy-efficient and environmentally sensitive railroad plant in the country. The plant is a step toward reducing carbon footprint; it includes energy-efficient lighting, low-flow toilets and sinks, tankless water heaters, reflective roofing to reduce heat usage, recycled rainwater, expansive windows to reduce lighting and power producing wind turbines. The company also collaborated with Navistar to provide pre-fabricated material to reduce fabrication waste at the plant. The plant also utilizes a major supplier stationed less than 15 miles away to reduce fuel usage, shipping costs and pollution generated during transport. FreightCar America has taken major steps to set a benchmark for being environmentally conscious.

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