Pressure Cars move into Storage
Storage continues to be active and we are now seeing pressure cars making their way to storage due to the warm winter thus far and demand destruction.
LNG Prices Collapsed
Asian liquefied natural gas (LNG) prices have collapsed over fears of the potential demand destruction from the coronavirus outbreak and the latest news out of China suggests those fears have been realized.
Rail Time Indicators
The AAR just released its monthly Rail Time Indicators report in which it reports railcars in storage. As of February 1, 2020, there were 400,215 empty railcars in storage, representing 23.9% of the North American fleet. This represented a 7,900 unit decrease (-1.9%) from last month and a 100,000 unit increase year or year (+33.3%).
What caused the decline in rail traffic?
The decline was driven by tank cars, covered hoppers, gondolas and box cars. This is the first monthly reduction in railcar storage levels since May 2019 and the largest decrease since September 2018. While this is a positive data point for the railcar manufacturers / lessors, we believe the reduction was to do with the seasonality of rail volumes as January volumes were 26% higher than December in addition crude by rail increased has increased significantly but is going to see headwinds with the recent train derailment in Saskatchewan Canada.
Bottom line is, railcar demand will remain muted in the near term from a combination of soft rail volumes and PSR implementation.
If you need or have storage available, have a project and need to perform maintenance, clean cars or reposition cars in a cost effective manner, call PFL today to trouble shoot your situation – we have a solution for you!
Loaded storage for energy products is still available, so please give PFL a call today.
It appears that the number of cars in service declined in roughly the same amount as the decline in covered hoppers in storage. Our analysis and conclusion based on discussion with industry participants is that those couple thousand cars were probably scrapped. If you would like a quote on any scrapping work, either mobile or fixed, please call PFL today.
If you are a storage operator or one considering and seeking storage for Transloading purposes, PFL currently has Transloaders available for immediate delivery. The Transloaders in question can be used for petroleum products such as gasoline, jet fuel and crude oil. For available specifications click here
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.