Posted on by Curtis Chandler Posted in Railcar Report

“I have learned that success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome while trying to succeed.” – Booker T. Washington

Jobs Update

  • Initial jobless claims for the week ending June 3rd, 2023 came in at 261,000, up +28,000 people week-over-week.
Chart for Initial jobless claims for the week ending June 3rd, 2023. Initial claims came in at 261,000, up +28,000 people week-over-week.
  • Continuing jobless claims came in at 1.757 million people, versus the adjusted number of 1.794 million people from the week prior, down -37,000 people week over week.
Chart for Continuing jobless claims showing that it came in at 1.757 million people, versus the adjusted number of 1.794 million people from the week prior, down -37,000 people week over week.

Stocks closed higher on Friday of last week and mixed week over week

The DOW closed higher on Friday of last week, up 43.17 points (0.13%), closing out the week at 33,876.78, down -114.02 points week over week. The S&P 500 closed higher on Friday of last week, up 4.93 points (+0.11%), and closed out the week at 4,298.86, up +16.49  points week over week. The NASDAQ closed higher on Friday of last week, up 18.37 points (+0.16%), and closed the week at 13,259.14, up +29.71 points week over week.

In overnight trading, DOW futures traded higher and are expected to open at 33,973 this morning up +64 points.

Crude oil closed lower on Friday of last week and lower week over week

WTI traded down -$1.12 per barrel (-1.6%) to close at $70.17 per barrel on Friday of last week, down -$1.57 per barrel week over week. Brent traded down -US$1.17 per barrel (-1.5%) on Friday of last week, to close at US$74.79 per barrel, down -US$1.34 per barrel week over week. 

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 500,000 barrels week over week. At 459.2 million barrels, U.S. crude oil inventories are 2% below the five-year average for this time of year.

Chart showing U.S. commercial crude oil inventories decreasing by 500,000 barrels week over week, currently at 459.2 million barrels, 2% below the five-year average for this time of year.

Total motor gasoline inventories increased by 2.7 million barrels week over week and are 8% below the five-year average for this time of year.

Chart illustrating total motor gasoline inventories increasing by 2.7 million barrels week over week, currently 8% below the five-year average for this time of year.

Distillate fuel inventories increased by 5.1 million barrels week over week and are 16% below the five-year average for this time of year.

Chart depicting distillate fuel inventories rising by 5.1 million barrels week over week, currently 16% below the five-year average for this time of year.

Propane/propylene inventories increased by 1.7 million barrels week over week and are 30% above the five-year average for this time of year.

Chart displaying propane/propylene inventories increasing by 1.7 million barrels week over week, currently 30% above the five-year average for this time of year.

Propane prices closed at 61 cents per gallon, down 2 cents per gallon week over week and down 63 cents per gallon year over year, as inventories continue to increase

Graph illustrating propane prices over a period of time.

Overall, total commercial petroleum inventories increased by 12.8 million barrels during the week ending June 2nd, 2023.

U.S. crude oil imports averaged 6.4 million barrels per day during the week ending June 2nd, 2023, a decrease of 817,000 barrels per day week over week. Over the past four weeks, crude oil imports averaged 6.6 million barrels per day, which is 3.5% higher than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) averaged 973,000 barrels per day, and distillate fuel imports averaged 172,000 barrels per day during the week ending June 2nd, 2023.

U.S. crude oil imports Alt tag: Graph depicting U.S. crude oil imports averaging 6.4 million barrels per day, a decrease of 817,000 barrels per day week over week. Also showing a comparison with the same four-week period last year.

U.S. crude oil exports averaged 2,475 million barrels per day for the week ending June 2nd, 2023, a decrease of -2.44 million barrels per day week over week. Over the past four weeks, crude oil exports averaged 4.062 million barrels per day.

Graph depicting U.S. crude oil exports averaging 2,475 million barrels per day, a decrease of 2.44 million barrels per day week over week. Also showing a comparison with the same four-week period last year.

U.S. crude oil refinery inputs averaged 16.6 million barrels per day during the week ending June 2, 2023, which was 481,000 barrels per day more than the previous week’s average.

Graph illustrating U.S. crude oil refinery inputs averaging 16.6 million barrels per day during the week ending June 2, 2023, a increase of 481,000 barrels per day compared to the previous week's average.

As of the writing of this report, WTI is poised to open at $68,31, down -$1.86 from Monday’s close.

North American Rail Traffic

Week Ending June 7th, 2023.

Total North American weekly rail volumes were down (-7.02%) in week 22 compared with the same week last year. Total carloads for the week ending on June 7th, 2023 were 335,851, down (+2.22%) compared with the same week in 2022, while weekly intermodal volume was 281,428, down (-12.15%) compared to the same week in 2022. 7 of the AAR’s 11 major traffic categories posted year-over-year increases with the most significant decrease coming from Grain (-21.42%). The largest increase came from Motor Vehicles and Parts (+16.12%).

In the east, CSX’s total volumes were down (-1.57%), with the largest decrease coming from Other (-10.64%) and the largest increase from Motor Vehicles and Parts (+24.32%).  NS’s volumes were down (-6.96%), with the largest decrease coming from Petroleum and Petroleum Products (-21.42%) and the largest increase from Grain (+18.59%).

In the West, BN’s total volumes were down (-13.67%), with the largest decrease coming from Grain (-30.73%), and the largest increase coming from Motor Vehicles and Parts (+30.73%). UP’s total rail volumes were down (-0.67%) with the largest decrease coming from Other (-24.38%) and the largest increase coming from Petroleum and Petroleum Products (+16.57%).

In Canada, CN’s total rail volumes were down (-9.77%) with the largest increase coming from Other (+25.93%) and the largest decreases coming from Grain (-32.28%). CP’s total rail volumes were down (-6.98%) with the largest decrease coming from Grain (-34.11%) and the largest increase coming from Coal (+45.70%).

KCS’s total rail volumes were down (-14.66%) with the largest decrease coming from Grain (-29.40%) and the largest increase coming from Other (+12.24%).

Source Data: AAR – PFL Analytics

Rig Count

North American rig count was up by 38 rigs week over week. U.S. rig count was down by -1 rigs week over week and down by -38 rigs year-over-year. The U.S. currently has 695 active rigs. Canada’s rig count up by +39 rigs week-over-week and down by -5 rigs year over year.  Canada’s overall rig count is 136 active rigs.  Overall, year-over-year, we are down -43 rigs collectively.

International rig count, which is reported monthly, was up by 18 rigs month-over-month and up by 148 rigs year-over-year. Internationally, there are 965 active rigs.

North American Rig Count Summary

NARC summary showing that the US lost 1 rig week over week. The US has 695 active rigs. Canada had 39 rigs come online increasing their total to 136. International Rig Count was up 18 rigs to 965 total active rigs.
rig count from 2022 to 2023

A few things we are keeping an eye on

We are watching Petroleum Carloads

The four-week rolling average of petroleum carloads carried on the six largest North American railroads fell to 25,334 from 25,458, which was a loss of -124 rail cars week-over-week. Canadian volumes declined week over week; CPKC’s shipments decreased by -10.5% week over week, and CN’s volumes were lower by -3.0% week-over-week. U.S. shipments were mostly lower. The NS had the largest percentage decrease and was down by -18.4% week-over-week.  The BN was the sole gainer and was up by +9.0%

 

We are watching the Weather Hurricane Season

With hurricane season starting on June 1st, PFL has been closely watching the weather.  With that said, El Niño conditions have developed, as the atmospheric response to the warmer-than-average tropical Pacific sea surface kicked in over the past month. The Climate protection center expects El Niño to continue into the winter.  What does this mean and how does this affect Hurricane season?  Simply put, El Niño favors stronger hurricane activity in the central and eastern Pacific basins and suppresses it in the Atlantic basin. Conversely, La Niña suppresses hurricane activity in the central and eastern Pacific basins, and enhances it in the Atlantic basin:

Source: NOAA – PFL Analytics

El Niño is good news for the gulf and rail in general.  We will be keeping an eye on this one.  Stay tuned to PFL.

We are watching Class 1 Industry Headcount

Headcount at the Class 1’s continues to accelerate at the same time rail traffic continues to soften – we are expecting to see increased levels of service if this trend continues.  Below are the latest and greatest April charts:

Industrial Rail Headcount
Industry year over year change
Sequential change in rail headcount

We are Watching Some Key Economic Indicators

Purchasing Managers Index (PMI)

The Institute for Supply Management releases two PMI reports – one covering manufacturing and the other covering services. These reports are based on surveys of supply managers across the country and track changes in business activity. A reading above 50% on the index indicates expansion, while a reading below 50% signifies contraction, with a faster pace of change the farther the reading is from 50. In May, the PMI decreased to 46.9% from April’s 47.1%, marking the seventh consecutive month of readings below 50% and a 0.2% decrease month over month from April. Meanwhile, the new orders component continued to contract to 42.6% in May.

PMI

Industrial Output & Capacity Utilization

The Federal Reserve reported that total U.S. industrial output rose a preliminary 0.5% in April 2023 over March 2023, marking its fourth straight month-to-month increase. The increase was mainly driven by a jump in automotive output in April due to surging output from motor vehicle plants. Year-over-year industrial output in April 2023 was up 0.24% over April 2022, marking the 26th straight year-over-year increase, but the smallest such increase in two years.

Industrial output and capacity utilization

U.S. Unemployment Rate

The Bureau of Labor Statistics’ May Employment Report, released on June 2nd, indicated another month of solid job growth. The labor market in the US appears to be strong despite weakness in manufacturing output and the Manufacturing PMI. In May, 339,000 net new jobs were created, and the official unemployment rate rose to 3.7%. The overall labor force participation rate in May was 62.6%, and the participation rate for prime-age workers was 83.4%, the highest it’s been since January of 2007. Average hourly earnings for private-sector workers rose 4.3% in May 2023 over May 2022, but year-over-year earnings adjusted for inflation have been negative for the past two years.

unemployment rate

Consumer Confidence

The Conference Board’s Index of Consumer Confidence decreased from April’s positively revised 103.7 to 102.3 in May, indicating a downward trend over the past few months. Consumers’ expectations fell, and their outlook for business conditions and labor markets worsened.  Similarly, the index of consumer sentiment from the University of Michigan slipped slightly in May, with consumers’ short and long-run economic outlook deteriorating modestly from the previous month.

consumer confidence

Consumer Spending

Consumer spending accounts for 70% of GDP and recent data shows a slowdown in spending. In April, total spending increased 0.9% compared to the month before adjusted for inflation, total consumer spending was up half of a percent in April.

personal consumption expenditures

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 239-390-2885

Lease Bids

  • 100, 28.3K DOT 111/117 Tanks needed off of UP or BN in Midwest/Texas for 5 Years. Cars are needed for use in Veg Oils/Biodiesel service.
  • 25-50, 33K Pressure Tanks needed off of CN or CP in Canada for Short Term. Cars are needed for use in Propylene service.
  • 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 117J Tanks needed off of BNSF or UP in the west for 3-5 Year. Cars are needed for use in magnesium chloride service. SDS onhand
  • 25-50, 25.5K 117J Tanks needed off of NS CSX in NorthEast for 5 Years. Cars are needed for use in Asphalt/Heavy Fuel Oil service.
  • 25-50, 25.5K 117J, 117R, CPC 1232 Tanks needed off of UP or BN in Texas for 1-2 Years. Cars are needed for use in Asphalt service.
  • 30-50, 33K 340W Pressure Tanks needed off of any class 1 in any location for 6-12 Months. Cars are needed for use in Propane service.
  • 60-150, 30K 117J Tanks needed off of TYR, UP in Corpus Christi, TX for 1 year. Cars are needed for use in Diesel service.
  • 100, 30K 117J Tanks needed off of CN in Detroit for 1 Year. Cars are needed for use in Refined Fuel service.
  • 15, 28.3K 117J Tanks needed off of any class 1 in any location for 3 year. Cars are needed for use in Glycerin & Palm Oil service.
  • up to 50, 31.8K 117J, 117R, CPC 1232 Tanks needed off of any class 1 in Texas or Ohio for 1-3 years. Cars are needed for use in Diesel/Gasoline service.
  • 45, 3000 cf PDs Hoppers needed off of any class 1 in Texas for 3 years. Cars are needed for use in Any service.
  • 25, 30K 117 Tanks needed off of CN in Canada for 1 year. Cars are needed for use in Refined Products service.
  • 30, 17K-20K 117J Tanks needed off of UP or BN in Midwest/West Coast for 3-5 Years. Cars are needed for use in Caustic service.
  • 10, 286K 15.7K Tanks needed off of KCS in Texas for 1 Year. Cars are needed for use in Sulfuric Acid service. Needed Next few months
  • 150, 23.5K DOT 111 Tanks needed off of any class 1 in LA for 2-3 Year. 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.
  • 25-50, 30K DOT 111, 117, CPC 1232 Tanks needed off of CN or CP in WI, Sarnia for 1-2 Years. Cars are needed for use in Diesel service.
  • 10, 30K DOT 111, 117, CPC 1232 Tanks needed off of UP or BN in Beaumont, Houston, Sunray for 6 Months. Cars are needed for use in Diesel service. Dirty to Dirty
  • 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
  • 30-40, 286K DOT 113 Tanks needed off of CN or CP/ UP in Canada/MM for 5 Years. Cars are needed for use in CO2 service. Q1
  • 70, 32K 340W Pressure Tanks needed off of CP or CN in Edmonton for 3 Years. Cars are needed for use in Propane service.
  • 200-300, 28.3K 117R or 117J Tanks needed off of CP or CN in Sarnia for 3 Years. Cars are needed for use in Fuel Oil service.
  • 30, 30K DOT 111 Tanks needed off of UP in Texas for 1-3 Years. Cars are needed for use in Diesel service.
  • 5-7, 28.3K 117R Tanks needed off of NS or CSX in NC for 1 Year. Cars are needed for use in UCO service.
  • 25-50, 5000CF-5100CF Lined 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
  • 10, any capacity Stainless Steel Tanks needed off of any class 1 in Canada for 5-10 years. Cars are needed for use in Alcohol service.
  • 30-50, 30K 117 Tanks needed off of any class 1 in Northeast or Midwest for 1 Year. Cars are needed for use in C5 service. Must have Magrods
  • 100, 33K 340W Pressure Tanks needed off of CN in Canada for 3-5 Years. Cars are needed for use in Propane service.
  • Up to 60, 5150cf Covered Hoppers needed off of CN, CSX, NS in the east or midwest for 3 years. Cars are needed for use in Fertilizer service. 3-4 hatch gravity dumps
  • 20-30, 14k Any Tanks needed off of BNSF, UP in Texas for 1-3 Years. Cars are needed for use in HCl service. Call for more details

Sales Bids

  • 1-2, Any DOT 111, 117, CPC 1232 Tanks needed off of any class 1 in Texas. Cars are needed for use in Any service. Coiled and Insulated
  • 45, 3000 cf PDs Hoppers needed off of any class 1 in Texas. Cars are needed for use in 3 years service. Negotiable
  • 30-40, 30K 117, DOT-111, CPC 1232 Tanks needed off of UP or BN in Iowa. Cars are needed for use in CO2 & Ethanol service.
  • 20-25, 25.5K 117, DOT-111, CPC 1232 Tanks needed off of UP or BN in Texas. Cars are needed for use in Veg Oil service. Coiled and insulated
  • 15, 30K 117, DOT-111, CPC 1232 Tanks needed off of UP or BN in Texas. Cars are needed for use in Veg Oil service.
  • 2-4, 28K DOT 111 Tanks needed off of BNSF Preferred in Minnesota. Cars are needed for use in Biodiesel service. Coiled and insulated
  • 100, Plate F Boxcars needed off of BN or UP in Texas.
  • 200+, 5000cf Covered Hoppers needed off of any class 1 in various locations. Cars are needed for use in Any 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, 2770 Mill Gondolas needed off of any class 1 in St. Louis. Cars are needed for use in Cement service.
  • 100, 15.7K DOT 111 Tanks needed off of CSX or NS in the east. Cars are needed for use in Molten Sulfur service.
  • 30, 17K-20K DOT 111 Tanks needed off of UP or BN in Texas. Cars are needed for use in UAN 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
  • 10, 4000 Open Hoppers are needed off of CSX in the northeast. Cars are needed for use in scrap metal service. Open top hopper

Lease Offers

  • 70, 25.5K, 117J Tanks located off of UP in Texas. Cars are clean Call for information
  • 30, 23.5K, DOT111 Tanks located off of UP or BN in Texas. Cars were last used in Clean / UAN.
  • 25-100, 17.6K, DOT111 Tanks located off of UP or BN in the Midwest. Cars were last used in Fertilizer / Corn syrup. Free Move
  • 20, 20k, DOT111 Tanks located off of CSX in GA. Cars are clean
  • 2, 20K, DOT111 Tanks located off of UP in TX. Cars are clean
  • 5, 20K, DOT111 Tanks located off of UP in TX. Cars were last used in Sulfuirc Acid. Free Move
  • 108, 28.3K, 117R Tanks located off of in Canada. Cars were last used in Crude. Dirty to Dirty
  • 25, 28.3K, DOT111 Tanks located off of UP in Texas. Cars were last used in Biodiesel. Free Move, Dirty to Dirty

Sales Offers

  • 100-200, 31.8K, CPC 1232 Tanks located off of BN in Chicago. Dirty/Clean
  • 100, 28.3K, 117J Tanks located off of various class 1s in multiple locations.
  • 150, 89’6, Flatcars located off of CN in Canada.

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

Live Railcar Markets

Lease Offers
Lease Bids
Sales Offers
Sales Bids
CAT Type Capacity GRL QTY LOC Class Prev. Use Clean Offer Note