Posted on by Curtis Chandler Posted in Railcar Report

“Little minds are tamed and subdued by misfortune; but great minds rise above them“

Washington Irving

Jobs Update

Initial and Continuing Jobless Claims

  • Initial jobless claims for the week ending February 19th came in at 232,000, down -17,000 people week over week.
  • Continuing claims came in at 1.476 million people versus the adjusted number of 1.588 million people from the week prior, down -112,000 people week over week.

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

The DOW closed higher on Friday of last week, up +834.92 points (+2.51%), closing out the week at 34,058.75 points, down -679.318 points week over week. The S&P 500 closed higher on Friday of last week, up +95.95 points  and closed out the week at 4,384.65, up +35.78 points week over week. The Nasdaq closed higher on Friday of last week, up +221.04 points (1.64%) and closed out the week at 13,694.62  up +146.56 points week over week.

In overnight trading, DOW futures traded lower and are expected to open at 33,595 this morning down -399 points.

Oil closed lower on Friday of Last Week WTI down week over week

West Texas Intermediate (WTI) crude closed down -$1.22 (-1.3%) on Friday of last week to settle at $91.59,  down -36 cents per barrel week over week, while Brent closed -$1.15 (-1.2%) to settle at $97.93 per barrel, up +$4.39 a barrel week over week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 4.5 million barrels week over week. At 416.0 million barrels, U.S. crude oil inventories are 9% below the five-year average for this time of year.

Total motor gasoline inventories decreased by 600,000 barrels week over week and are 3% below the five-year average for this time of year.

Distillate fuel inventories decreased by 600,000  barrels week over week and are 18% below the five-year average for this time of year. 

Propane/propylene inventories decreased by 3.9 million barrels week over week and are 22% below the five-year average for this time of year.

Propane prices, after a brief drop a week prior, continued higher last week closing out the week at $1.25 per gallon, up 5 cents per gallon week over week up 33 cents per gallon year over year.

Overall, total commercial petroleum inventories decreased by 1.8 million barrels week over week.

U.S. crude oil imports averaged 6.8 million barrels per day for the week ending February 18th 2022, an increase of 1 million barrels per day week over week. Over the past four weeks, crude oil imports averaged  6.5 million barrels per day, 14.1% more than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) averaged 416,000 barrels per day and distillate fuel imports averaged 416,000 barrels per day for the week ending February 18th..

U.S. crude oil refinery inputs averaged 15.2 million barrels per day during the week ending February 18, 2022, up 344,000 barrels per day week over week.

As of the writing of this report, WTI is poised to open at $96.14 , up $4.55 per barrel from Thursday’s close.

North American Rail Traffic

Total North American rail volumes were up 24% year over year in week 7 (U.S. +31.7%, Canada +5.4%, Mexico +9.9%) resulting in quarter to date volumes that are down 4.2% year over year (U.S. -2.7%, Canada -10.0%, Mexico -0.9%). Please note week 7 faced the easiest year over year comp as 2021 was faced with  severe weather disruptions. All of the AAR’s 11 major traffic categories posted year over year increases with the largest increases coming from intermodal (+19.2%) and coal (+43.9%).

In the East, CSX’s total volumes were up 13.8%, with the largest increases coming from intermodal (+18.3%) and chemicals (+14.9%). NS’s total volumes were up 20.5%, with the largest increases coming from intermodal (+23.8%) and coal (+27.9%).

In the West, BNSF’s total volumes were up 27.8%, with the largest increases coming from coal (+58.9%), intermodal (+14.4%), chemicals (+70.2%) and grain (+37.3%). UP’s total volumes were up 53.5%, with the largest increases coming from intermodal (+45.3%), coal (+81.8%), stone sand & gravel (+398.1%) and chemicals (+44.8%).

In Canada, CN’s total volumes were up 7.5%, with the largest increases coming from coal (+150.7%), chemicals (+21.4%), petroleum (+24.8%) and grain (+28.0%). The largest decreases came from intermodal (-4.4%) and farm products (-61.4%). Revenue per ton miles was up 4.4%. CP’s total volumes were up 12.5%, with the largest increases coming from intermodal (+15.0%) and coal (+25.2%). Revenue per ton miles was up 5.1%.

KCS’s total volumes were up 44.7%, with the largest increases coming from intermodal (+47.3%), grain (+77.6%), motor vehicles & parts (+82.3%) and chemicals (+42.4%).

Source: Stephens

Rig Count

North American rig count is up by 9 rigs week over week. U.S. rig count was up by 5 rigs week over week and up by 248 rigs year over year. The U.S. currently has 650 active rigs. Canada’s rig count was up by 4 rigs week over week and up by 61 rigs year over year and Canada’s overall rig count is 224 active rigs.  Overall, year over year, we are up 301 rigs collectively.

North American Rig Count Summary

A few things we are keeping an eye on:

Petroleum Carloads

The four-week rolling average of petroleum carloads carried on the six largest North American railroads rose to 24,264 from 24,219, a gain of 45 rail-cars week over week. Canadian volumes were flat  week over week.  U.S. volumes were down across the board with the NS having the largest percentage decrease (down by 15.5%).

Railcar Orders and Deliveries

New railcar orders improved in a meaningful way to 13,500 units in the fourth quarter of 2021 versus 8,600 units in the third quarter of 2021 and the backlog increased 14% sequentially to 43,000 units. Overall, the demand environment is clearly improving and industry participants have discussed the recovery as being broad based (across all car types – except coiled and insulated tank cars). This is also supported by railcar utilization and lease rates that continued to improve during this past quarter.The industry remains in the early stages of a multi-year recovery.

 Railcar Deliveries –  Fourth quarter 2021 deliveries were 8,200 units up 31% year over year, but down 2% quarter over quarter. FTR Intel recently adjusted its 2022 delivery forecast to 43,500 units (from 48,700 units) and its 2023 delivery forecast to 56,300 units (from 63,300 units). This forecast now assumes a 48% year over year increase in 2022 and a 29% year over year increase in 2023.

We believe the railcar industry is experiencing a positive inflection point in demand based on the recent improvement in utilization.  Older cars continue to be scrapped at record rates and storage utilization continues to decline and are back to levels not seen since 2016.

Crude by Rail in Canada

Canadian crude by rail hit a  four-year low.  Crude by rail shipments averaged 164,000 barrels per day in 2021 down 15% year over year.  Crude by rail volumes just released by the Canadian Energy Regulator for the month of December came in at 131,224 down 1,072 barrels per day month over month.   This is a far cry from the peak seen in February 2020 which came in at 411,991 barrels per day.  Enbridge’s Line 3 replacement added 370,000 barrels per day of capacity out of Canada. The outlook looked bleak for crude by rail volumes until the announcement made recently by Trans Mountain pipeline that its project is going to be delayed and not come on until the fourth quarter of 2023 from the fourth quarter of 2022.  Trans Mountain will add 500,000 barrels a day of capacity out of Canada and will target Asian markets from Canada’s west coast.  The impact to producers waiting for the project to be complete is unknown at this point – maybe a short term resurgence of crude by rail could pop its head up given Trans Mountain delays?  We would have expected to see production volumes ramp up inside of Alberta in the anticipation of Trans Mountain being on time in the third quarter of 2022, but the delay could urge incremental barrels to once again hit rail at some point before Q4 of 2023 as transportation on pipelines remain relatively tight.  Oil sands projects have experienced delays themselves and have recently run into some production problems so time will tell.   The situation with Russia remains a wild card with the Biden administration under pressure to reduce production restrictions here in the United States. Stay tuned to PFL for further details.

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 trouble shoot 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

PFL is seeking:

  • 5, 29k Tank Cars needed in Texas off the KCS for 5 years. Needs to be lined.
  • 100, 2480CUFT Ag Gons needed in Texas off the UP for 1-3 Years.
  • 50, 30K+ Tank cars needed in several locations. Can take in various location off various Class 1’s. Can have prior Ethanol heel or Gasoline heel.
  • 300 5800 Covered hoppers needed for plastic – 5 year lease – negotiable
  • 50 29K C&I Tanks for veg oil to purchase – Immediate need
  • 15 5200-5500 PD hoppers in the west UP for 5 years for soda ash negotiable
  • 30 5800 and 6250 covered gons for sale
  • 50, 5800cuft or larger Covered Hopper for use in DDG needed in the Midwest for 3-4 years. Immediate need.
  • 10-20 Covered hopper grain cars in the midwest 5200-5500 2-3 years
  • 20-30, 19K Tank Cars for Caustic Soda needed in Texas off the UP or BN.
  • 100 Moulton Sulfur cars for purchase – any location – negotiable
  • 12 Plate F 286 GRL Boxcars 12’ plug doors midwest preferred for 1 year lease
  • 30-50 Log Flats with stanchions 286K GRL in the midwest/east CSX NS 1-3 years negotiable
  • 50 Ag Gons 2500-2800cuft 286k GRL in the east CSX for 5 years negotiable
  • 25 Covered wood chip Gons 6000CF 286 GRL any location for 1-3 years negotiable
  • 25 Boxcars for paper 6000CF 286 GRL 1-3 years anywhere
  • 100 15K Tanks 286 for Molten Sulfur in the Northeast CSX/NS for 6 months negotiable
  • 100, 5800 Covered Hoppers 286 can be West or East for Plastic 3-5 years
  • 70, 117R or J needed for Ethanol for 3 years.  Can take in the South.
  • 50, 6500+ cu-ft Mill Gon or Open Top Hopper for wood chips in the Southeast for 5 Years.
  • 25 bulkhead flats 286 any class one for up to 5 years Negotiable
  • 20, 19,000 Gal Stainless cars in Louisiana UP for nitric acid 1-3 years – Oct negotiable
  • 10, 6,300CF or greater covered hoppers are needed in the Midwest.
  • 2, 89’ Flat cars for purchase or lease – needed in TX off the BNSF

PFL is offering:

  • Various tank cars for lease with dirty to dirty service including, nitric acid, gasoline, diesel, crude oil, Lease terms negotiable, clean service also available in various tanks and locations including Rs 111s, and Js – Selection is Dwindling. Call Today!
  • 200 Clean C/I 25.5K 117J in Texas. Brand New Cars!
  • 150 25.5 111’s in the midwest for sale – Negotiable
  • 150 117R’s 31.8 clean for lease in Texas – negotiable
  • 31.8K Tank Cars last in Diesel. Dirty to dirty in Texas
  • 200 117Js 29K OK and TX Clean and brand new – Lined- lease negotiable
  • 100 117Rs dirty last in Gasoline in Texas for lease Negotiable
  • 90 117Rs 30K located in Alberta CN or CP Refined Products Dirty – negotiable
  • 25 BRAND NEW 5161 Sugar Hoppers in Arkansas UP – negotiable
  • 99 340W Pressure Cars various locations Butane and Propane dirty negotiable
  • 100 73 ft 286 GRL riser less deck, center part for sale
  • 19 auto-max II automobile carrier racks – tri-49 for sale – negotiable
  • 10 food grade stainless steel cars sale or lease
  • 20 20K Stainless cars in 3 locations in the south – sale or lease – negotiable
  • 30 CPC 1232 25.5K C/I Pennsylvania NS clean negotiable
  • 100-150 29K C/I 117J cars for lease. Dirty in Bakken crude and can be returned dirty.
  • 100 29K C/I 1232 cars for lease. Dirty in Heavy Crude and can be returned dirty.
  • 50 29K 117Js in Nebraska for sale or lease clean last in crude – available Feb 2022
  • 100 117Rs 29K clean last used in crude Washington State – price negotiable sale or lease
  • 21 111s 29K tanks last in alcohol dirty on the CN in Wisconsin for lease price negotiable
  • 100 111s of various volumes and locations last in fuel oil dirty price negotiable
  • Various Hoppers for sale and lease 3000-5800 CF 263 and 286 multiple locations negotiable
  •  28 20K Veg oil cars for lease in Arkansas – Negotiable
  • 100 3200 Covered Hoppers for sale price negotiable
  • 100 Center beam Flats with risers 73ft in SD and Iowa for sale negotiable

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 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 scraping 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