PFL Railcar Storage Report 4-6-2020

Storage continues to be very active as demand destruction from COVID-19 reaps havoc in the world and particularly in the U.S. As many of you know, it has been a trickle down effect on the U.S. economy. With people self-isolating, businesses closed and folks not going to shops and restaurants, consumption and consumer spending has plummeted by 40%. As a result, rail traffic has been dragged down substantially and energy consumption is in the toilet. Some estimate that we are 20 mill barrels a day over supplied in crude oil right now – natural gas in storage is now 17% above the 5 year average. We all know that President Trump has intervened with the Saudis and the Russians to get them to cut production by 10 million barrels a day and even if he is successful in brokering that deal, it just may not be enough!

Association of American Railroads

The AAR just released its monthly Rail Time Indicators report in which it reports railcars in storage. As of April 1, 2020, there were 394,200 empty railcars in storage, representing 23.6% of the North American fleet. This represented a 394 unit increase (+0.1%) from last month and an 80,800 unit increase year over year (+25.8%). The uptick was primarily driven by increases in tank cars and open-top hoppers that were largely offset by declines in flat cars, covered hoppers and gondolas. Looking ahead, we believe storage levels will likely continue to move significantly higher as the negative impact of COVID-19 on rail volumes intensifies. Railcar demand and production will approach prior recessionary levels.

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If you need of 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  solutions for you!

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Loaded storage for energy products is still available, so please give PFL a call today

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