PFL Railcar Report 2-5-2024

“Being a top performer – whether it’s in business or on the athletic field – requires grit and tenacity, as well as the continuous desire to become better.”
– Amy Morin

Jobs Update

• Initial jobless claims seasonally adjusted for the week ending January 27th, 2023 came in at 224,000, up 9,000 people week-over-week.

• Continuing jobless claims came in at 1.898 million people, versus the adjusted number of 1.828 million people from the week prior, up 70,000 people week-over-week.

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

The DOW closed higher on Friday of last week, up 134.58 points (+0.35%), closing out the week at 38,654.42, up 544.99 points week-over-week. The S&P 500 closed higher on Friday of last week, up 52.42 points (+1.07%), and closed out the week at 4,958.61, up 67.64 points week-over-week. The NASDAQ closed higher on Friday of last week, up 267.31 points (+1.73%), and closed out the week at 15,628.95, up 173.59 points week-over-week.

In overnight trading, DOW futures traded lower and are expected to open at 38,681 this morning down 84 points.

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

WTI traded down $-1.54 per barrel (-2%) to close at $72.28 per barrel on Friday of last week, down -$5.73 per barrel week-over-week. Brent traded down -US$1.37 per barrel (-1.7%) on Friday of last week, to close at US$77.33 per barrel, down -US$6.22 per barrel week-over-week.

One Exchange WCS for February delivery settled on Friday of last week at US$18.65 below the WTI-CMA. The implied value was US$53.64 per barrel. On Thursday of last week, it settled at US$19.00 below the WTI-CMA for February delivery. The implied value was US$54.76 per barrel.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 1.2 million barrels week-over-week. At 421.9 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 1.2 million barrels week-over-week and are 1% above the five-year average for this time of year.

Distillate fuel inventories decreased by 2.5 million barrels week-over-week and are 5% below the five-year average for this time of year.

Propane/propylene inventories decreased by 5.3 million barrels week-over-week and are 1% above the five-year average for this time of year.

Propane prices closed at 88 cents per gallon, down 1 cents per gallon week-over-week, down 4 cents year-over-year.

Overall, total commercial petroleum inventories decreased by 9.6 million barrels during the week ending January 26, 2024.

U.S. crude oil imports averaged 5.6 million barrels per day during the week ending January 26, 2024, an increase of 25,000 barrels per day week-over-week. Over the past four weeks, crude oil imports averaged 6.2 million barrels per day, 5.9% less than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) averaged 400,000 barrels per day, and distillate fuel imports averaged 138,000 barrels per day during the week ending January 26, 2024.

U.S. crude oil exports averaged 3,894 million barrels per day for the week ending January 27, 2024, a decrease of 540,000 barrels per day week-over-week. Over the past four weeks, crude oil exports averaged 4.17 million barrels per day.

U.S. crude oil refinery inputs averaged 14.8 million barrels per day during the week ending January 26, 2024, which was 428,000 barrels per day less week-over-week.

WTI is poised to open at $71.86, down 42 cents per barrel from Friday’s close.

North American Rail Traffic

Week Ending January 31st, 2023.

Total North American weekly rail volumes were up (0.04%) in week 5, compared with the same week last year. Total carloads for the week ending on January 31st were 330,278, down (-7.3%) compared with the same week in 2023, while weekly intermodal volume was 322,702, up (8.86%) compared to the same week in 2023. 8 of the AAR’s 11 major traffic categories posted year-over-year decreases with the most significant decrease coming from Nonmetallic Minerals, down (-17.19%) while the largest increase came from Intermodal Units up (8.86%).

In the East, CSX’s total volumes were up (3.22%), with the largest decrease coming from Nonmetallic Minerals, down (-11.96%) while the largest increase came from Petroleum and Petroleum Products up (18.84%). NS’s volumes were up (1.78%), with the largest increase coming from Intermodal (+8.64%) while the largest decrease came from Petroleum and Petroleum Products (-14.75%).

In the West, BN’s total volumes were down (3.04%), with the largest increase coming from Intermodal  (+17.64%) while the largest decrease came from Nonmetallic Minerals, down (-26.33%). UP’s total rail volumes were down (-3.41%) with the largest decrease coming from Nonmetallic Minerals, down (-30.9%).

In Canada, CN’s total rail volumes were down (-7.97%) with the largest decrease coming from Grain (-41.3%) while the largest increase came from Nonmetallic Minerals up (+9.47%). CP’s total rail volumes were up (+2.98%) with the largest increase coming from Intermodal (+51.14%) while the largest decrease came from Other, down (-48.10%).

KCS’s total rail volumes were down (-8.08%) with the largest decrease coming from Other (-38%) and the largest increase coming from Nonmetallic Minerals (+12.79%).

Source Data: AAR – PFL Analytics

Rig Count

North American rig count was flat week-over-week. U.S. rig count was down by -2 rigs week-over-week and down by -140 rigs year-over-year. The U.S. currently has 619 active rigs. Canada’s rig count was up by 2 rigs week-over-week, but down by -17 rigs year-over-year.  Canada’s overall rig count is 232 active rigs. Overall, year-over-year, we are down -157 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 27,779 from 29,605, which was a loss of -1,826 railcars week-over-week.  The fourth week of consecutive week-over-week declines. Canadian volumes were lower. CPKC’s shipments fell by -2.2% week over week. CN’s volumes were lower by -3.5% week-over-week. U.S. shipments were down across the board. The UP had the largest percentage decrease and was down by -22.5%.

We Continue to Watch Canada’s Trans Mountain Pipeline

As a refresh to our readers, the Canadian government acquired the pipeline from Kinder Morgan for CA $4.5 billion in 2018 and formed the Trans Mountain Corporation (TMC) to oversee and manage the pipeline and the expansion project.  Ever since then,  there’s been Government fighting the Government – a Canadian Federal Government owned pipeline fighting the Canadian Energy Regulator to get it built trying to satisfy the hard left.  When it comes on-stream, the expansion will nearly triple the pipeline’s current 300,000 barrels per day (b/d) capacity to move crude oil from Edmonton in landlocked Alberta to Canada’s Pacific Coast for export to new customers in Asia or along the U.S. West Coast where West Coast refineries are awaiting more Canadian crude production via the pipeline. The pipeline expansion, which consists of added pipeline capacity that generally runs along a similar route to the current pipeline, has faced many legal challenges from environmental activists and Canadian First Nations groups.  See Map below:

Trans Mountain Pipeline Route (December 2023)

Source: EIA

The pipeline was supposed to come on by the end of 2023 – did not happen!  The pipeline was supposed to come on stream during Q12024 – looks like that is not going to happen!  On Monday of last week, Trans Mountain made the following statement on the Mountain 3 Horizontal Directional Drill:

“During the pipeline pullback activity for the Mountain 3 Horizontal Directional Drill (HDD) between January 25 and 27, 2024, Trans Mountain encountered technical issues which will result in additional time to determine the safest and most prudent actions for minimizing further delay.

Trans Mountain is fully focused on the completion of the pipeline and will not be providing interviews at this time as it works towards the anticipated in-service date in the second quarter of 2024.” 

Despite the delays, the 80,000 barrel tank was approved by the Canadian Energy Regulator on January 26. The tank, formally known as Tank 7, will be filled using the 39 tanks currently sitting in Edmonton currently holding a total of 9.25 million barrels. We’ll keep watching this one folks, as it’s a significant crude by rail factor.  Stay tuned to PFL for further details.

 We are Watching Shipping Routes

Red Sea-driven surge in container shipping rates lost some momentum as spot indexes recently leveled off as the market adjusted to new Round-Africa as the new ‘normal’. We will see what happens in the days to come with the Whitehouse’s lackluster retaliation response in regards to Iran’s backed proxies that continue to hammer us.

Mass diversions of container ships around Africa’s Cape of Good Hope caused spot rates to surge, but the Red Sea effect had a limit, which may have already been reached.  What goes up, must come down.  See world shipping routes below:

Maritime Shipping Routes and Strategic Locations

 Source: National Center for Ecological Analysis and Synthesis

---

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

---

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.
• 80, 30K 117R or 117J Tanks needed off of UP in Nebraska for 12 Months. Cars are needed for use in Ethanol 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.

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.
• 140, 60ft, Boxcars located off of various class 1s in multiple locations.
• 300-500, 3250s, Covered Hoppers located off of various class 1s in multiple locations.
• 100-300, 3400, Covered Hoppers located off of various class 1s in multiple locations.
• 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.
• 150, 29.2K, DOT117R Tanks located off of various class 1s in multiple locations.

---

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

PFL will be at the Following Conferences

• Where: Renaissance Schaumburg Convention Center Hotel
• Attending: Curtis Chandler (239.405.3365), David Cohen (954-729-4774), Cyndi Popov (403-402-5043)
• 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