Bob Lyons: Yes, and Allison, I’ll add to that too, Paul’s comment there that, as we’ve said historically, better the higher velocity and more opportunities for the railroads is not something that we fear. We want our customers choosing rail as their mode of choice. And so, we don’t want a situation where customers are frustrated because they can’t move product by rail and look elsewhere. So, we feel much better and, as Paul said, more optimistic about the fact that if they do improve velocity we know, from talking with customers, there’s product there ready to go on rail.
Allison Poliniak: Great, that’s helpful. And then just a question on boxcars, it seems like there’s been a structural decline in terms of amount of scrap, and it’s not necessarily surprising, but just want to understand how you view that period, I see you investing, but maybe not at the level of the scrappage rate. Is there a size that maybe you’re too large right now, just any thoughts on that fleet overall?
Paul Titterton: No, actually I would say quite the opposite. We’ve been investing in boxcars, as has the industry. We’re not alone in that. We’re going through a cycle because there were a huge number of boxcars built in the 1970’s, really up through 1981, and those are scrapping out. So, what we’re seeing here is the ageing out of the fleet, and then the replacement investment in higher-capacity newer cars to address that. And we think that that replacement demand is attractive. We also think that, to the extent we see more modal shift to rail, particularly ESG-driven modal shift in the future from companies that want to reduce their carbon footprint, the boxcar could really be a beneficiary of that. So, I would say right now, for us, the boxcar portfolio has been a good portfolio for us. And we’re hoping and expecting it continues to be a good portfolio for us.
Allison Poliniak: Perfect. Thank you.
Operator: The next question is from Bascome Majors with Susquehanna. Your line is open.
Bascome Majors: Looking at the portfolio, can you talk a little bit about where lease rates are versus your assessments with the long-term average?
Paul Titterton: So, we are finally in a position now where we can report that for most of the portfolio — for the significant majority of the portfolio, lease rates are now generally over their long-term averages. It’s higher for certain car types, lower for other car types. And I would say right now, slightly higher across the board for tank than it is for freight. But in both cases, we are generally at least a bit over our long-term averages across the portfolio.
Bascome Majors: And as you look forward and think about positioning the portfolio, can you talk a little bit high-level about your priority of rate versus term this year, and where you’re really pushing harder?
Paul Titterton: So, we are, as we are in all rising rate environments, particularly when rates get above our long-term averages, we are going to work with our customers to incentivize them to choose longer-term leases. And so, this is a playbook that we’ve repeated in every upcycle. And we’re going to continue to push on that now.
Bascome Majors: And lastly, it certainly sounds, at least with tone, that you’re more enthusiastic about investing acquisitively in North American rail assets today than you have been in your recent quarter. Can you talk a little bit — I mean, are we right in that assessment? And regardless of whether we are or not, just anything that you can share about what has changed or where opportunities have resumed in sales, and in how assets are being shaken out of where they were or valuations are being changed? And anything to just give us a little bit of more color on that would be helpful? Thanks.
Bob Lyons: Sure, Bascome. I — what I would say is, up or down market, GATX is always interested in adding assets to the portfolio, particularly rolling stock. We’ve done so in up markets, we’ve done so in down markets. It comes down to us to the attractiveness of the underlying asset and the economic return we can earn. And so, the diversified fleet that we have, there’s no asset out there we’re not familiar with. And absolutely, we want to continue, that the portfolio is very — the franchise is very scalable. Platform is very scalable; we want to add asset. But we certainly won’t chase them. We’ll be — continue to be very disciplined and selective. But yes, we’re always — there probably isn’t many portfolios or many assets that change hands out there that we don’t get a look at. And we buy when it makes on — checks all the right boxes for us.
