AAR Rail Time Indicators
The AAR just released its monthly Rail Time Indicators report in which it reports railcars in storage. As of May 1, 2020, there were 418,119 empty railcars in storage, representing 25.0% of the North American fleet. This represents a 23,900 unit increase or a 6.1% increase month-over-month and a 107,100 unit increase or 34.4% increase year-over-year. This is the largest sequential monthly increase since June 2015 and the second largest increase on record. Storage levels increased for every car type, with the most significant increases coming from tank cars, covered hoppers and gondolas.Railcar Storage
Storage continues to be very active – demand destruction from COVID-19 reaps havoc. Crude oil is now estimated to be oversupplied by roughly 30 mil barrels per day coming into May as production cuts from OPEC and Russia kicked in coupled with commercially driven shut ins here in the U.S. and Canada. The marginal barrel that could not fit into pipelines was hauled away by tank cars to refineries. Producer shut-ins have taken that marginal crude oil barrel off line driving tank cars into storage. To add to the woes, consumer spending in March was down 7.5% and expected to be much worse in April resulting in decreased demand for other goods untimely affecting rail traffic cars of all car types.
Looking ahead, we believe storage levels will likely continue to move higher in the short term as the negative impact of COVID-19 on rail volumes resulting in weaker demand, crude oil destruction resulting in shut ins by producers across North America, China trade tensions, PRS implementation and new rail car production hitting the market. Longer term we expect a sharp reversal, but it is difficult to predict when this will happen – it’s all up to the individual states reopening their economies and consumer behavior when that happens.
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!
If you are a leasing company and having cars being returned on lease call PFL today to secure a return on lease location.
Loaded storage for crude oil and LPG’s in key market areas is still available, so please give PFL a call today.
Live Railcar Storage Availability
As a storage operator or a user of storage, PFL can help maximize you 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.