PFL Railcar Report 1-29-2024

“If your actions inspire others to dream more, learn more, do more, and become more, you are a leader.” – John Quincy Adams

Jobs Update

• Initial jobless claims seasonally adjusted for the week ending January 20th, 2023 came in at 214,000, up 25,000 people week-over-week.

• Continuing jobless claims came in at 1.833 million people, versus the adjusted number of 1.806 million people from the week prior, up 27,000 people week-over-week.

Stocks closed mixed on Friday of last week, but up week over week

The DOW closed higher on Friday of last week, up 60.30 points (0.16%), closing out the week at 38,109.43, up 245.63 points week-over-week. The S&P 500 closed lower on Friday of last week, down -3.19 points (-0.07%), and closed out the week at 4,890.97, up 51.16 points week-over-week. The NASDAQ closed lower on Friday of last week, down 55.12 points (-0.36%), and closed out the week at 15,455.36, up 144.39 points week-over-week.

In overnight trading, DOW futures traded lower and are expected to open at 38,228 this morning down 30 points.

Crude oil closed higher on Friday of last week and up week over week

WTI traded up $0.65 per barrel (0.8%) to close at $78.01 per barrel on Friday of last week, up $4.60 per barrel week-over-week. Brent traded up US$1.12 per barrel (1.4%) on Friday of last week, to close at US$83.55 per barrel, up US$4.99 per barrel week-over-week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 9.2 million barrels week-over-week. At 420.7 million barrels, U.S. crude oil inventories are 5% below the five-year average for this time of year.

Total motor gasoline inventories increased by 4.9 million barrels week-over-week and are 1% above the five-year average for this time of year.

Distillate fuel inventories decreased by 1.4 million barrels week-over-week and are 4% below the five-year average for this time of year.

Propane/propylene inventories decreased by 8.4 million barrels week-over-week and are 4% above the five-year average for this time of year. 

Propane prices closed at 89 cents per gallon, up 14 cents per gallon week-over-week, flat year-over-year.

Overall, total commercial petroleum inventories decreased by 22.3 million barrels during the week ending January 19, 2024.

U.S. crude oil imports averaged 5.6 million barrels per day during the week ending January 19, 2024, a decrease of 1.8 million barrels per day week-over-week. Over the past four weeks, crude oil imports averaged 6.5 million barrels per day, 5.3% more than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) averaged 628,000 barrels per day, and distillate fuel imports averaged 201,000 barrels per day during the week ending January 19, 2024.

U.S. crude oil exports averaged 4.434 million barrels per day for the week ending January 19, 2024, a decrease of 595,000 barrels per day week-over-week. Over the past four weeks, crude oil exports averaged 4.519 million barrels per day.

U.S. crude oil refinery inputs averaged 15.3 million barrels per day during the week ending January 19, 2024, which was 1.4 million barrels per day less week-over-week.

WTI is poised to open at $77.99, down -2 cents per barrel from Friday’s close.

North American Rail Traffic

Week Ending January 24th, 2023.

Total North American weekly rail volumes were down (-15.8%) in week 4, compared with the same week last year. Total carloads for the week ending on January 24th were 270,738, down (-23.41%) compared with the same week in 2023, while weekly intermodal volume was 276,083, down (-6.73%) compared to the same week in 2023. 11 of the AAR’s 11 major traffic categories posted year over year decreases with the most significant decrease coming from Nonmetallic Minerals, down (-38.63%).

In the East, CSX’s total volumes were down (-16.48%), with the largest decrease coming from Grain, down (-45.68%). NS’s volumes were down (-15.64%), with the largest increase coming from Other (+5.39%) while the largest decrease came from Coal, down (-32.56%).

In the West, BN’s total volumes were down (-9.69%), with the largest increase coming from Other (+18%) while the largest decrease came from Nonmetallic Minerals, down (-42.61%). UP’s total rail volumes were down (-17.11%) with the largest decrease coming from nonmetallic Minerals, down (-48.47%).

In Canada, CN’s total rail volumes were down (-22.32%) with the largest decrease coming from Grain (-65%). CP’s total rail volumes were down (-24.17%) with the largest increase coming from Forest Products (+18.26%) while the largest decrease came from Nonmetallic Minerals, down (-50.37%).

KCS’s total rail volumes were down (-28.29%) with the largest decrease coming from Nonmetallic Minerals (-69.15%) and the largest increase coming from Motor Vehicles and Parts (+15.55%).

Source Data: AAR – PFL Analytics

Rig Count

North American rig count was up by 8 rigs week-over-week. U.S. rig count was up by 1 rig week-over-week, but down by -150 rigs year-over-year. The U.S. currently has 621 active rigs. Canada’s rig count was up by 7 rigs week-over-week, but down by -17 rigs year-over-year.  Canada’s overall rig count is 220 active rigs. Overall, year-over-year, we are down -167 rigs collectively.

North American Rig Count Summary

A few things we are watching:

We are watching Petroleum Carloads

The four-week rolling average of petroleum carloads carried on the six largest North American railroads fell to 29,605 from 29,615, which was a loss of -10 rail cars week-over-week.  The third week of consecutive week-over-week declines. Canadian volumes were mixed. CPKC’s shipments rose by +13.1% week over week. CN’s volumes were lower by -5.8% week-over-week. U.S. shipments were also mixed.   The CSX had the largest percentage increase and was up by +15.4%.  The BN had the largest percentage decrease and was down by -3.8%.

We are watching Crude by Rail out of Canada

The Canadian Energy Regulator (“CER”) updated its monthly crude by rail numbers on January 24, 2024.   For November 2023, Canada exported 167,006 barrels per day by rail (up by +25,125 barrels per day month over month) and continues to move higher.  This is now the seventh consecutive month-over-month increases and its highest reading since June of 2022.

We are expecting to see volumes continue to increase as producers continue to build inventory and are in need of a crude by rail outlet. Despite a lower spread out of Edmonton as of late, a weak Canadian Dollar and a relatively high crude number from a Canadian dollar perspective will not deter the Canadian producer. One Exchange WCS (Western Canadian Select) for March delivery settled Friday at US$16.10 below the WTI-CMA (West Texas Intermediate – Calendar Month Average). The implied value was US$61.71 per barrel or roughly $83.90 Canadian per barrel. On Thursday, it settled at US$17.50 below the WTI-CMA for March delivery. The implied value was US$59.64 per barrel.

All are waiting for Trans Mountain to start up and see how all this shakes out.  We are now looking at line pack to begin in March and be completed within three weeks.  Deliveries should begin in April with increased capacity of 600,000 barrels per day.

We are watching the Whitehouse – you’re not going to believe this one

Folks, it is getting hard to take – we need change –we are quickly imploding – letting down the country and our allies. The Biden administration export halt announced on Friday of last week is putting U.S. LNG industry’s expansion plans at risk. We cannot make this stuff up – what is wrong with Natural Gas?  It is the cleanest burning fuel that we have – we were blessed with a ton of it, it is cheap and we need to consume it and not leave it in the ground!  Current pricing on natural gas below:

The future of the anticipated expansion of U.S. LNG was put in jeopardy on Friday of last week when the White House ordered a halt of new export authorizations while the U.S. Department of Energy (DOE) beefs up its review process to consider the climate and economic effects of greater exports.  The U.S., which became the world’s leading LNG exporter in 2023, was poised for a wave of new exports to meet an anticipated near doubling of demand in China, as well as significant demand growth in Northeast Asia and South Asia.

The U.S.’s total LNG operating capacity currently stands at 14 bcfd, but DOE has already authorized a three-fold increase to 48 bcfd, the DOE said in a statement on Friday of last week. The decision will not affect the 8 LNG terminals already in operation, nor will the review impede the 10 projects that already hold DOE export authorizations and are currently under construction.

The White House said any further boost in LNG exports demands that the U.S. take “a hard look” at its impact on climate change. “This pause on new LNG approvals sees the climate crisis for what it is: the existential threat of our time,” President Joe Biden said in a statement.

Developing the new LNG review process will take months, a DOE spokeswoman said, adding that Energy Secretary Jennifer Granholm said the process would include public comments, which would require further time. This move will most likely delay approval of nearly a dozen proposed LNG export projects until after the November presidential election.

Sen. Joe Manchin (D-WV), chairman of the Senate Energy and Natural Resources Committee, Friday blasted the decision and vowed to hold hearings in the coming weeks. “Let me be crystal clear: America’s LNG policy should be based on facts, not politics. The indisputable facts are that, to date, America’s LNG production has strengthened our economy, created good-paying jobs, supported the energy needs of our allies around the world, and helped reduce global emissions,” he said in a statement.

 The American Petroleum Institute (API) on Friday released the following statement from President and CEO Mike Sommers on the Biden administration’s announcement to pause approvals of new LNG export facilities, unnecessarily increasing project wait times at a time of geopolitical turmoil and rising coal use around the world.

“This is a win for Russia and a loss for American allies, U.S. jobs and global climate progress. There is no review needed to understand the clear benefits of U.S. LNG for stabilizing global energy markets, supporting thousands of American jobs and reducing emissions around the world by transitioning countries toward cleaner fuels. This is nothing more than a broken promise to U.S. allies, and it’s time for the administration to stop playing politics with global energy security.”

At the same time the war on Natural Gas Continues on the State Level

Advocates urge Governor Healey to oppose major gas expansion proposal – The proposal would involve major gas pipeline upgrades from N.J. to Mass.

A coalition of climate advocates is calling on Governor Maura Healey to oppose the proposed expansion of a gas pipeline, called “Project Maple,” which they say would hurt frontline communities and worsen the climate crisis.

In a letter sent to Healey on Wednesday of last week, the advocates asked Healey to clarify her stance on the proposed project from the Canadian-based pipeline and energy company Enbridge. Healey has previously said she won’t allow any new gas pipelines, but Project Maple isn’t technically new. The company has proposed building next to existing pipelines and making upgrades to increase capacity.

“This project must be stopped,” wrote a coalition of climate and clean energy advocacy groups, including the Sierra Club, 350 Mass, and the Conservation Law Foundation. “The extraction, transportation and burning of fossil fuels like fracked-gas is leading to catastrophic climate change.”

The proposed project would expand the capacity of the existing Algonquin Gas Transmission line, which starts in northern New Jersey and terminates in Massachusetts at the Weymouth Natural Gas Compressor Station. From there, it connects with another pipeline north of Boston. According to Enbridge, the target in-service date is Nov. 2029.  Stay tuned to PFL we are watching this one. See below:

Project Maple

Source : Enbridge – PFL Analytics

We are watching Car Orders, Deliveries and Back Log

Orders not surprisingly decreased year over year and sequentially. Orders in the quarter totaled 4,164 railcars, which is down -64% year over year from 11,525 railcars in Q422, and down -55% from Q323’s total of 9,346. Freight orders totaled 2,425 railcars in the quarter vs. 6,974 non-tank cars in Q323. Covered hopper net orders totaled 326 railcars or -8% of the total orders, with large-cube covered hoppers representing more than the majority of orders at 706 cars vs. 2,872 railcars in Q323. This quarter saw net cancelations for mid-cube and small-cube covered hoppers of -330 and -50, respectively, vs. +1,711 and zero cars, respectively, in Q323. Industry orders for tank cars totaled 1,739 vs. 3Q23 orders for 2,372 tanks. Together, tanks and covered hoppers accounted for 50% of total orders in the quarter vs. 74% last quarter.

• Deliveries down year over year but up sequentially vs. 3Q23. Total deliveries of 10,994 railcars were down -10% year over year but up +4% sequentially. Tank deliveries totaled 2,167 while non-tank deliveries totaled 8,827 in the quarter. That implies Q423 tank deliveries decreased -18% year over dear and increased +9% sequentially. Freight deliveries decreased -8% year over year but were up +3% sequentially.

• Backlog was down year and sequentially. Industry backlog now stands at 51,836 railcars, down from Q323’s level of 58,680 railcars. Tank backlog was down slightly to 14,233 cars vs. 14,606 in Q323. Freight backlog decreased -15% to 37,603 railcars from last quarter’s 44,074 railcars. Concentration of car types in current backlog remained relatively stable, with a consistent heavier weighting in covered hoppers and tank cars, which account for 52% and 27% of current backlog, respectively, vs. 52% and 25% in Q323. Apparent net cancelations totaled 618 cars in the quarter.

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We have been extremely busy at PFL with return-on-lease programs involving rail car storage instead of returning cars to a shop.  A quick turnaround is what we all want and need.   Railcar storage in general has been extremely active.  Please call PFL now at 239-390-2885 if you are looking for rail car storage, want to troubleshoot a return on lease scenario, or have storage availability.  Whether you are a car owner, lessor or lessee, or even a class 1 that wants to help out a customer we are here to “help you help your customer!”

Leasing and Subleasing has been brisk as economic activity picks up. Inquiries have continued to be brisk and strong Call PFL Today for all your rail car needs at 239-390-2885

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Lease Bids

• 50-100, 4750CF Open/Covered Hoppers needed off of BN in Washington for Feb-Jun. Cars are needed for use in Petcoke service.
• 100, 30K Dot 111 or CPC 1232 Tanks needed off of UP or BN in New Orleans/Passadena for 6-12 Months. Cars are needed for use in Gasoline/Diesel service.
• 80, 29k 117R or 117J Tanks needed off of Any Class 1 in Kentucky for 1-5 Years. Cars are needed for use in Crude service.
• 50, 19k DOT111 Tanks needed off of UP or BN in Nevada or CA for 1 year. Cars are needed for use in Sulfuric Acid service. March or April
• 8, 28-30K Any Tanks needed off of UP BN in Texas and Gulf for 5 years. Cars are needed for use in Chlorobenzene service. Need Magrods
• 14, 23.5K DOT111 Tanks needed off of UP in Morrilton, AR for 1 year. Cars are needed for use in Turpentine service.
• 10, 30k any Tanks needed off of UP BN in Texas for 1 year plus. Cars are needed for use in Fuel Oil service.
• 25-50, 5000CF-5100CF Covered Hoppers needed off of BNSF, CSX, KCS, UP in Gulf LA for 3-10 years. Cars are needed for use in Dry sugar service. 3 bay gravity dump, Hempel 37700
• 30-40, 28.3K DOT117R, DOT117J, DOT111 Tanks needed off of UP in Iowa for 2-3 years. Cars are needed for use in Feedstocks service.
• 25, 3230 PD Hoppers needed off of NS or CSX in Ohio for 5 years. Cars are needed for use in Flyash service.
• 50, 23.5-25.5 DOT111 Tank s needed off of Any Class 1 in USA for 5 years. Cars are needed for use in Asphalt service.
• 25, 30K Any Tanks needed off of in Houston for December -June. Cars are needed for use in Diesel service.
• 75, 30K Any Tanks needed off of Any Class 1 in Chicago for December 23-May 24. Cars are needed for use in Gasoline service.
• 10, 2500CF Open Top Hoppers needed off of UP or BN in Texas for 5 years. Cars are needed for use in aggregate service. Need Rapid Discharge Doors
• 108, 28.3K Any Tanks needed off of CN in Canada for 1-3 years. Cars are needed for use in Crude service.
• 20-25, 30K DOT117 Tanks needed off of UP or BN in Illinois for 5 years. Cars are needed for use in Ethanol service.
• 100, 28.3K Any Tanks needed off of UP or BN in Midwest/Texas for 5 years. Cars are needed for use in Veg Oils / Biodiesel service. Need to be Unlined
• 50-100, 4550 Covered Hoppers needed off of UP or BN in Texas for 5 years. Cars are needed for use in Grain service.
• 10, 33K 340W Pressure Tanks needed off of CN in LA for 1 year. Cars are needed for use in Butane service.
• 25, 20.5K CPC1232 or DOT117J Tanks needed off of BNSF or UP in the west for 3-5 years. Cars are needed for use in Magnesium chloride service. SDS onhand
• 25-50, 25.5K DOT117J Tanks needed off of NS CSX in Northeast for 5 years. Cars are needed for use in Asphalt / Heavy Fuel Oil service.
• 15, 28.3K DOT117J Tanks needed off of any class 1 in any location for 3 years. Cars are needed for use in Glycerin & Palm Oil service.
• 30, 17K-20K DOT117J Tanks needed off of UP or BN in Midwest/West Coast for 3-5 years. Cars are needed for use in Caustic service.
• 150, 23.5K DOT111 Tanks needed off of any class 1 in LA for 2-3 years. Cars are needed for use in Fluid service. Needed July
• 25-50, 32K 340W Pressure Tanks needed off of NS or CSX in Marcellus for 1-2 years. Cars are needed for use in Propane service. Q1
• 25-50, 30K DOT111, DOT117, CPC 1232 Tanks needed off of CN or CP in WI, Sarnia for 1-2 years. Cars are needed for use in Diesel service. Q2-Q3
• 10, 28.3K DOT 111, 117, CPC 1232 Tanks needed off of UP or BN in Iowa for 2 years. Cars are needed for use in Biodiesel service.
• 10, 5200cf PD Hoppers needed off of UP in Colorado for 1-3 years. Cars are needed for use in Silica service. Call for details
• 10, 30K 117R or 117J Tanks needed off of Any Class 1 in USA for 1 year. Cars are needed for use in Glycerin service.
• 80, 30K 117R or 117J Tanks needed off of UP in Nebraska for 12 Months. Cars are needed for use in Ethanol service.

Sales Bids

• 10, 2770 Mill Gondolas needed off of any class 1 in St. Louis. Cars are needed for use in Cement service.
• 20, 2770-3400 Mill Gondolas needed off of any class 1 in South Texas. Cars are needed for use in scrap metal service.
• 20, 2770 Mill Gondolas needed off of CSX in the northeast. Cars are needed for use in non-haz soil service. 52-60 ft
• 100-150, 3400CF Covered Hoppers needed off of UP BN in Texas. Cars are needed for use in Sand service.
• 8, 5200 Covered Hoppers needed off of various class 1s in various locations. Cars are needed for use in Plastic Pellet service.
• 20-30, 3000 – 3300 PDs Hoppers needed off of BN or UP preferred in West. Cars are needed for use in Cement service. C612
• 10, 4000 Open Hoppers needed off of CSX in the northeast. Cars are needed for use in scrap metal service. Open top hopper
• 10, 6400 Open Hoppers needed off of CSX in the northeast. Cars are needed for use in wood chip service. Open top hopper, flat bottom
• 45, 3000 cf PD Hoppers needed off of any class 1 in Texas. Negotiable
• 200+, 5000cf Covered Hoppers needed off of any class 1 in various locations.
• 5, 3400CF Closed Hoppers needed off of any class 1 in Ohio. Cars are needed for use in Sand service.
• 20, 17K DOT111 Tanks needed off of various class 1s in various locations. Cars are needed for use in corn syrup service.
• 100, 15.7K DOT111 Tanks needed off of CSX or NS in the east. Cars are needed for use in Molten Sulfur service.
• 30, 17K-20K DOT111 Tanks needed off of UP or BN in Texas. Cars are needed for use in UAN service.
• 2-4, 28K DOT111 Tanks needed off of BNSF Preferred in Minnesota. Cars are needed for use in Biodiesel service. Coiled and insulated

Lease Offers

• 15, Plate E and F Boxs located off of NS in New Orleans. Cars are clean Double Sliding Doors
• 10, 28.3K, DOT117R Tanks located off of All Class Ones in St Louis. Cars are clean Call 239-390-2885 for more information
• 10, 21.9K, Tanks located off of UP in Longview, TX. Cars are clean CO2 Cars. Brand New. 2-5 Year Lease
• 38, 4750 plus, 3-4 Hatch Gravity Covered Hopperss located off of CSX CN CP in Florida. Sub-lease 12-18 months
• 125, 28.3K, 117J Tanks located off of Various Class 1s in Multiple locations. Cars are clean Long Term Lease, 5 Years +
• 80, 25.5K, 117J Tanks located off of UP in Texas. Cars are clean Long term Lease.

Sales Offers

• 20, Refer, Box Boxcars located off of UP in ID.
• 100-200, 31.8K, CPC1232 Tanks located off of BN in Chicago. Mix of dirty and clean cars
• 100, 28.3K, DOT117J Tanks located off of various class 1s in multiple locations.
• 100, 17K, DOT111 Tanks located off of various class 1s in multiple locations.
• 100, 19K, DOT111 Tanks located off of various class 1s in multiple locations.
• 120, 31.8K, CPC1232 Tanks located off of various class 1s in multiple locations.
• 300-500, 3250s, Covered Hoppers located off of various class 1s in multiple locations.
• 140, 60ft, Boxcars located off of various class 1s in multiple locations.
• 150, 29.2K, DOT117R Tanks located off of various class 1s in multiple locations.
• 100-300, 3400, Covered Hoppers located off of various class 1s in multiple locations.

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Call PFL today to discuss your needs and our availability and market reach. Whether you are looking to lease cars, lease out cars, buy cars, or sell cars call PFL today at 239-390-2885

PFL offers turn-key solutions to maximize your profitability. Our goal is to provide a win/win scenario for all and we can handle virtually all of your railcar needs. Whether it’s loaded storage, empty storage, subleasing or leasing excess cars, filling orders for cars wanted, mobile railcar cleaning, blasting, mobile railcar repair, or scrapping at strategic partner sites, PFL will do its best to assist you. PFL also assists fleets and lessors with leases and sales and offers Total Fleet Evaluation Services. We will analyze your current leases, storage, and company objectives to draw up a plan of action. We will save Lessor and Lessee the headache and aggravation of navigating through this rapidly changing landscape.

PFL IS READY TO CLEAN CARS TODAY ON A MOBILE BASIS WE ARE CURRENTLY IN EAST TEXAS

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Live Railcar Markets

PFL will be at the Following Conferences

• Where: Renaissance Schaumburg Convention Center Hotel
• Attending: Curtis Chandler (239.405.3365), David Cohen (954-729-4774), Brian Baker (239)297-4519
• Conference Website

• Where: La Quinta Resort & Club, La Quinta, California
• Attending: Curtis Chandler (239.405.3365)
• Conference Website

• Where: Charlotte Harbor, Florida
• Attending: David Cohen (954-729-4774), Brian Baker (239)297-4519
• Conference Website