The number of cars in storage continued to decline, marking the 9th consecutive month of declining total storage numbers. As of April 1, 2021, there was a total of 378,241 cars in storage, a decline of 14,270 cars (-3.64%) month over month. This is the largest decline in storage cars since October of last year. The number of cars in storage is now 15,609 cars lower than March of 2020 when the pandemic started, signaling a recovery in the rail industry at a time when other industries are still struggling. We are not out of the woods yet, but we’ve seen improvements in rail traffic and increased scrapping of older assets that should bring railcar inventories closer to equilibrium. At these levels this represents 22.92% of the total North American rail fleet in storage, down from 23.73 % last month. The total number of cars in service also declined, by 3,152 cars or .19%, for a total of 1,650,573. Other than January 2021, this was the biggest decline in the number of cars in service in years.
The total number of cars in storage had a big drop this month, driven primarily by Open Top Hoppers (-11.25%), Gondolas (-9.75%), and Flat cars (-10.99%). The number of Covered Hoppers and Tanks in storage both actually increased slightly last month, and together they represent 66.19% of all the cars in storage. Excluding those two categories every category we track saw sequential MoM declines.
Traffic picked back up across the US as the country thawed from the freeze, with traffic for the last week of March up 16.1% YoY. We are cautiously optimistic; however, these YoY comparisons are inflated due to pandemic related shutdowns according to statements from the AAR. Intermodal volumes for instance are up a whopping 25.8%, but this is driven in large part by the massive disruption to intermodal traffic that occurred around this time last year. The one exception to pandemic disruptions seems to have been grain, as CN just reported its 13th consecutive month of record grain shipments. Taking into account last year’s pandemic related rail volume drop, “rail traffic has clearly rebounded” and “recent signs of strength in manufacturing are good signs for railroads, too,” AAR’s SVP John Gray noted in the AAR traffic report for March 2021 and the week ending April 3, 2021.
Railcar manufactures, including Greenbrier and Trinity are becoming increasingly optimistic. GBRX reported “its most challenging quarter of the fiscal year” with large drops in railcar deliveries due to “a weak demand environment and extreme winter weather”. “Our near-term outlook is becoming increasingly optimistic as rail fundamentals improve,” Chairman and CEO William A. Furman said. “Rail loadings are up year-to-date, driven by increased traffic in grain, intermodal and other categories. Railroad velocity has slowed by nearly 2 mph. Railcars in storage have decreased by more than 148,000 units from the 2020 peak storage level. Proposed environmental and other regulations in both North America and Europe should support secular demand for rail as a growing mode for freight transport. Fiscal stimulus and proposed infrastructure legislation are expected to further add to demand.” Things should continue to progress for the countries major car owners if freight and equipment fundamentals continue to improve.
If you are need of or have storage available or if you need maintenance, the cleaning of cars or are looking to reposition cars in a cost effective manner, call PFL today! We can trouble shoot your situation and work diligently to find a solution for you!
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Live Railcar Storage Availability
As a storage operator or a user of storage, PFL can help maximize your profitability. PFL offers turn-key solutions to operators and users alike. PFL Field Services LLC is preforming work inside many storage operations and short lines. PFL Field Services will clean railcars, service railcars cars and scrap cars on a mobile basis with a PFL Guarantee and has crews available ready to serve you today no matter where you are at in the country. We have acquired top rated, brand new equipment to service you the customers. PFL Field Services also offers inspection services from top rated qualified inspectors now full time at PFL. Call us today to book a time! Our goal is to provide a win/win scenario for all and we can handle virtually all of your railcar needs onsite at a storage facility. Saving a user empty moves to a shop. Not only is it more efficient saving time and money for the car owner or lessee and lessor but retains the short lines storage customer at the facility over the long term. PFL handles loaded storage, empty storage mobile railcar cleaning, blasting, mobile railcar repair and scrapping of all railcars at storage facilities across the country. If you are an operator and have cars onsite that your customers need to have work done let them know you can do it via PFL Field Services. We can assist on return on lease scenarios saving Lessor and Lessee thousands of dollars. Call the desk today 239-390-2885.