{"id":529,"date":"2020-03-30T12:13:15","date_gmt":"2020-03-30T16:13:15","guid":{"rendered":"http:\/\/pflpetroleum.com\/reports\/?p=529"},"modified":"2023-07-28T11:07:52","modified_gmt":"2023-07-28T15:07:52","slug":"pfl-railcar-report-3-30-2020","status":"publish","type":"post","link":"https:\/\/pflpetroleum.com\/reports\/pfl-railcar-report-3-30-2020\/","title":{"rendered":"PFL Railcar Report 3-30-2020"},"content":{"rendered":"\n
\n

\u201cWe shall defend our island, whatever the cost may be, we shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender.\u201d<\/strong><\/p>\nWinston Churchill<\/cite><\/blockquote>\n\n\n\n

\n\n\n\n

COVID-19 Update<\/h2>\n\n\n\n

Folks, the battle continues with COVID -19<\/u><\/strong> as cases spiked over the weekend in the United States with currently 143,055  confirmed cases.<\/u><\/strong>  This is expected to rise as there are a lot of people that have not been tested.<\/p>\n\n\n\n\n\n\n\n

Jobs have always been a\nconcern from the onset of the virus<\/u><\/strong>, as cash strapped small businesses had no choice but to lay people off after being forced to shut down their businesses.  As a result, Americans have lost over 3 million jobs<\/u><\/strong>\nlast week.  Expect more of the same this\nweek given the expansion of the\nvirus and a prolonged slowdown in the U.S. economy.  <\/p>\n\n\n\n

Equities traded down on Friday after unprecedented moves to the upside Tuesday through Thursday.  In overnight trading futures traded lower<\/u><\/strong> and as  writing this report the overnight futures trading was volatile, swinging from green to red with the Dow now set to open pretty much flat for the day.<\/p>\n\n\n\n

Even in crisis, there are winners and losers <\/strong><\/h2>\n\n\n\n

Current Winners:<\/strong><\/p>\n\n\n\n

    \n
  1. Trucking Companies and delivery Companies<\/u><\/strong> Trucking rates are climbing across the U. S. as demand to haul essential goods skyrockets more than outpacing any decline in freight from shippers whose customers have shut down.  Transportation economists warn the market could cool soon if non-essential retailers remain closed and cancel existing orders. Freight volumes were up 60 percent week over week.<\/u><\/strong><\/li>\n\n\n\n
  2. Short Lines and Private Track Storage Company\u2019s<\/u><\/strong> \u2013 The need for railcar storage has exploded over the last couple of weeks as companies park  idle tank cars due to demand destruction.<\/li>\n\n\n\n
  3. Ground Tank storage Companies and Floating Storage<\/u><\/strong>  \u2013 production is hard to shut or slow down  – we expect to see in tank storage to get very full of crude,<\/u><\/strong> RBOB and Jet Fuel sooner over the next couple of weeks.  Also, fleets are being contracted for floating storage<\/u><\/strong> as the White House scrapped plans to purchase oil for the countries strategic oil reserves as funding was not available in the $2 Trillion package.   Diesel is holding up well due to truckers working overtime to get the people what they need.<\/u><\/strong><\/li>\n<\/ol>\n\n\n\n

    Current Losers:<\/strong><\/p>\n\n\n\n

      \n
    1. Energy\ncompanies<\/u><\/strong> – Whether you are a Transloader,\nproducer or midstream company you are taking it on the chin right now in this\nunprecedented environment.  Railcars are non-essential for the\nmovement of crude right now, however, with the current contango in the market loaded storage may be an\noption<\/u><\/strong> \u2013 call PFL to discuss.<\/li>\n\n\n\n
    2. Refiners<\/u><\/strong>\n\u2013 Current crack spreads are horrible \u2013 again the only positive is diesel.<\/li>\n\n\n\n
    3. Retailers,\nRestaurants Hotels and Specialty shops<\/u><\/strong> \u2013 no explanation\nneeded, as the country has been hard hit with no real definitive hard date set\nfor reopening of the economy as we know it.<\/li>\n<\/ol>\n\n\n\n

      We have been extremely busy at PFL with return on lease programs, storage \u2013 please call PFL today 239-390-2885.<\/strong><\/p>\n\n\n\n

      \n\n\n\n

      Railcar Volumes<\/h2>\n\n\n\n

      Total\nNorth American rail volumes were down 7.7% year over year in week 12<\/u><\/strong> (U.S. -8.6%, Canada -5.7%, Mexico -3.9%), resulting in quarter to date volumes that are down 5.5% (U.S. -7.2%, Canada -2.0%, Mexico +3.5%). 7 of the AAR’s 11 major traffic categories posted year over year declines with the largest decreases coming from intermodal (-11.5%), coal (-13.2%), nonmetallic minerals (-11.0%), grain (-7.9%) and motor vehicles & parts (-8.5%). The largest increases came from chemicals (+11.3%) and farm products & food (+10.5%).<\/p>\n\n\n\n

      In the East, CSX\u2019s\ntotal volumes were down 2.8%,<\/u><\/strong> with the largest decrease coming from\ncoal (-19.0%). NS\u2019s total volumes\nwere down 15.1%,<\/u><\/strong> with the largest decreases coming from intermodal\n(-15.3%), coal (-33.7%) and stone sand & gravel (-28.7%).<\/p>\n\n\n\n

       In the West,\nBN\u2019s total volumes were down 10.4%,<\/u><\/strong>\nwith the largest decreases coming from intermodal (-15.9%) and coal (-3.6%).\nThe largest increase came from chemicals (+12.7%). UP\u2019s total volumes were down 1.7%,<\/u><\/strong> with the largest\ndecreases coming from intermodal (-7.3%) and stone sand & gravel (-26.2%).\nThe largest increases came from chemicals (+14.7%) and coal (+9.4%). <\/p>\n\n\n\n

      In Canada, CN\u2019s\ntotal volumes were down 7.4%<\/u><\/strong> with the largest decrease coming from\nintermodal (-17.9%). The largest increases came from farm products (+61.6%) and\nchemicals (+11.1%). RTMs were up 5.0%. CP\u2019s\ntotal volumes were up 1.7%,<\/u><\/strong> with the largest increases coming from farm\nproducts (+74.2%) and chemicals (+12.8%). The largest decrease came from\nintermodal (-6.6%). RTMs were up 5.4%. <\/p>\n\n\n\n

      KCS\u2019s total\nvolumes were up 3.0%,<\/u><\/strong> with the largest increases coming from petroleum\n(+22.0%) and chemicals (+22.7%).<\/p>\n\n\n\n

      North\nAmerican Rig count is down 88 rigs week over week<\/u><\/strong> with the U.S. losing 44\nrigs and Canada losing 44 rigs week over week. \nYear over year we are down 312<\/u><\/strong>\nRigs collectively.  Cuts in drilling\ncontinue as oil and gasoline continue to decline.   Canada now only has 54 rigs nationwide\noperating<\/u><\/strong> as oil prices are now below $9.00 per barrel crushing\nproducers.  Canadian crude by rail\nvolumes were mostly lower last week amid declining transport differentials.  CP shipments fell by 26.6 percent and CN\u2019s\nvolumes rose by 7.7 percent.  U.S. energy\nfirms cut the most oil rigs in a week since April 2015, removing rigs for a\nsecond week in a row as a COVID- 19 related slump in economic activity and fuel\ndemand has forced massive retrenchment in investment by oil and gas\ncompanies.  The oil rig count is down 24 per cent here in the U.S. from the same\nweek a year ago when 816 rigs were active.<\/u><\/strong>  More than half the total U.S. oil rigs are in\nthe Permian basin in West Texas and eastern New Mexico, where active units\ndropped by 23 this week to 382, the lowest since November 2017. This was the\nbiggest weekly decline since March 2015.<\/p>\n\n\n\n

       Capital spending programs have been\nslashed with more to come.<\/u><\/strong> \nPhillips announced last week they were deferring two large pipeline\nprojects \u2013 Redoak and Liberty.  Magellans\nand Navigator are shifting gears.  When\nthere is a crisis you have to make quick decisions and they are being made for\ncapital preservation until we get through this crisis.  <\/p>\n\n\n\n

      North American Rig Count Summary<\/strong><\/h2>\n\n\n
      \n
      \"\"
      Source: Baker Hughes<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n
      \n\n\n\n

      Railcar Markets<\/h2>\n\n\n\n

      PFL is offering: <\/strong>340Ws for long and short term lease, 117Rs last in diesel service, various box cars for lease, 31.8\u2019s clean and last in refined products, 25.5K 117Js coiled and insulated, as well as 5000 CFC Center Flow Pressureaide Covered Hopper cars that have recently been cleaned. Call PFL for details today!<\/p>\n\n\n\n

      PFL is seeking: <\/strong>23.5Ks and 25.5Ks for fuel oil products, 117s with magnetic gauging devices for lease, 117s dirty with condensate, 89 ft flat cars for purchase, 100 mil gons for short term lease, and 117Js last in ethanol. <\/p>\n\n\n\n

      \n\n\n\n