Covered Railcars in Central Asia: The Market Is Moving Beyond Shortages, but Demand Is Becoming More Selective
Just a few years ago, the covered railcar market in Central Asia was primarily perceived as a shortage market: there were not enough cars during peak seasons, owners could raise rates, and cargo owners were willing to pay for guaranteed rolling stock availability.
In 2026, the situation is beginning to change. Rail freight volumes in the region are growing, trade flows are becoming more intensive, but at the same time the supply of railcars is increasing and container logistics is developing. Therefore, over the next two to three years, the covered railcar market is likely to grow not simply through an increase in the number of cars, but through changes in the structure of freight flows.
Uzbekistan — the Main Growth Driver
The Uzbek market appears to be one of the most promising for covered railcars.
In the first quarter of 2026, 28 million tonnes of cargo were transported by rail in Uzbekistan, 4.3% more than a year earlier. Grain and flour-milling products accounted for 3.3 million tonnes, an increase of 41.4%.
Particularly important is the fact that Uzbekistan remains a major buyer of Kazakh grain and flour. In 2025, Kazakhstan supplied approximately 400,000 tonnes of flour to Uzbekistan, while in 2026 total grain and flour exports in grain-equivalent terms continued to grow rapidly. By the end of July, Kazakhstan's exports to Uzbekistan had reached 5.8 million tonnes, approximately 36% higher year on year.
This is an important signal for the covered railcar market.
Some of these commodities are transported in specialized grain rolling stock. However, the growth of grain processing, flour trade, feed, packaged products and other food commodities is creating additional demand for universal covered railcars.
Kazakhstan Is Becoming the Main Source of Freight Flows
Kazakhstan is simultaneously a major supplier of goods and the largest transit hub in the region.
In 2025, more than 14.3 million tonnes of grain were transported across the Kazakhstan Temir Zholy network, 31% more than a year earlier. Grain transportation toward Central Asia increased by 30%, reaching 6.3 million tonnes.
Between January and April 2026, grain transportation on the KTZ network increased by another 13%, reaching 5.3 million tonnes, while grain exports reached 4.2 million tonnes. At the same time, transportation of processed grain products increased by 3%, while feed transportation surged by 62%.
The latter figure is particularly interesting for covered railcar owners.
The market is gradually moving from the transportation of raw materials toward products with higher added value. This means a growing volume of cargo requiring protection from precipitation and external environmental conditions.
Afghanistan Becomes an Additional Growth Factor
Another potentially strong market is Afghanistan.
Between September 2025 and July 2026, Kazakhstan's exports of grain and flour to Afghanistan, measured in grain-equivalent terms, increased by 57%, reaching 2.4 million tonnes.
If this trend continues, the southern corridor could become one of the most attractive markets for covered railcars.
However, there is an important consideration: this market will depend heavily on the political situation, border-crossing capacity and the ability to secure return cargo.
For a railcar owner, this means that a Kazakhstan–Afghanistan trip alone does not guarantee high profitability. Securing a return load becomes a key factor.
The Main Problem — Empty Runs
Over the coming years, empty mileage could become the key factor determining the economics of covered railcars.
Central Asia has a pronounced structure of export and import flows. Some routes are heavily loaded in one direction, while railcars may have to return empty.
Therefore, the market will gradually move from the model:
“We have a railcar — let's find a cargo.”
to:
“We have a round trip — we need a railcar for it.”
The most successful operators will be those capable of combining several freight flows — for example, Kazakhstan → Uzbekistan, followed by a return load from Uzbekistan to Kazakhstan or another destination.
Containers — the Main Competitor to Covered Railcars
At the same time, unlimited demand growth cannot be expected.
Containerization will gradually take away part of the cargo traditionally transported in covered railcars, particularly higher-value, standardized and international cargo.
In 2025, Uzbekistan's export-import container transportation volume reached 355,752 TEU, an increase of 21%. Import container transportation alone increased by 30%.
At the same time, rail trade between China and Central Asia continues to develop. In 2025, trade between China and Kazakhstan through China-Europe rail routes reached RMB 5.32 billion, an increase of 19.1%. In January–February 2026, 3,501 freight trains were dispatched on China-Europe routes, 32% more than a year earlier.
This means that some traditional covered-railcar cargo will gradually shift to containers.
But the Shortage Will Not Disappear Completely
Despite fleet expansion, it is still too early to speak of market saturation.
Uzbekistan is already investing in the renewal of its railcar fleet. Between 2023 and 2025, 1,590 gondola cars were manufactured, while government policy provides for further expansion of freight railcar production.
However, an expanding fleet does not automatically eliminate the need for privately owned railcars.
On the contrary, growing freight volumes are creating additional demand for rolling stock, particularly during seasonal peaks.
Infrastructure constraints also remain a significant factor. International transport corridors in Central Asia are developing faster than certain elements of railway and terminal infrastructure. UNECE highlights capacity constraints affecting railways, ports and terminals, as well as border-crossing challenges.
What Will Happen to Rates?
My forecast is that the railcar rate market will become increasingly volatile.
During peak seasons, the cost of a covered railcar could rise sharply again, particularly on routes with limited supply. During the off-season, however, owners will face stronger competition.
The market is therefore gradually dividing into two segments:
1. High-quality railcar + attractive route + guaranteed cargo.
Rates in this segment are likely to remain relatively high.
2. Older universal railcar without guaranteed loading.
Competition in this segment will be significantly stronger.
Railcar age, technical condition, ability to provide the car quickly for loading, and the availability of a permanent customer will increasingly influence the price.
Forecast for 2027–2028
I expect demand for covered railcars in Central Asia to grow by approximately 3–7% annually under the base-case scenario.
Under a favorable scenario — accelerating Kazakhstan–Uzbekistan trade, growing food exports, expansion of the Afghan corridor and continued growth in rail transit — the market could achieve 7–10% annual growth.
Under a negative scenario involving stronger containerization, infrastructure constraints or declining volumes of certain export commodities, the market could move toward virtually zero growth.
The key point is that the number of railcars will grow faster than effective demand for standard universal covered railcars.
This means that simply owning railcars will no longer be enough.
Who Will Win?
The most promising players will not necessarily be those who own the largest number of railcars, but those who control freight flows.
The most attractive markets include:
- Kazakhstan → Uzbekistan;
- Kazakhstan → Kyrgyzstan;
- Kazakhstan → Afghanistan;
- Kazakhstan → Turkmenistan;
- domestic transportation within Uzbekistan;
- flour, feed and processed grain products;
- food and industrial cargo;
- round trips with minimal empty mileage.
The Main Conclusion
The Central Asian covered railcar market is not disappearing — it is becoming more professional.
In the past, it was possible to make money simply by taking advantage of railcar shortages. In 2027–2028, the advantage will belong to those who can simultaneously provide three elements:
cargo → railcar → return load.
Growing rail freight volumes in Kazakhstan and Uzbekistan are creating a foundation for further demand growth. Grain, flour-milling and food-related flows look particularly strong. At the same time, containerization and the renewal of national fleets will limit rate growth for standard rolling stock.
Therefore, my forecast for the covered railcar market in 2026–2028 can be summarized as follows:
demand — growing;
rates — volatile;
competition — increasing;
seasonal shortages — will remain;
empty mileage — the main risk;
high-quality, properly positioned railcars — will remain in demand.
This is why the next stage of development of the Central Asian rail market is no longer simply about expanding the railcar fleet. It is about maximizing the efficiency of every railcar and every round trip it makes.