Year to date carloading for grain is up almost 20% from 2013. Coal is flat (Thanks, Obama). Motor Vehicles and Parts up 5%.
Delays? Look at volume, first.
Posted on 09/05/2014 5:02:30 AM PDT by thackney
Rail shipments of crude oil rose to 119,634 carloads in the most recent fiscal quarter, an increase of more than 10 percent over the 106,605 shipments in the comparable period last year, according to figures released Thursday by the American Association of Railroads.
The association, an industry trade group, called it the busiest quarter ever for crude oil shipments by rail. In the single month of August, shipments rose 25 percent compared to the previous August. Shipments of other commodities showed more modest gains.
As oil production has soared past pipeline capacity, trains have become a favored alternative for the petroleum industry. But as traffic continues to increase, the practice has drawn intense scrutiny.
A series of accidents and spills, including a derailment that killed dozens of people last year in a small town in Canada, have prompted federal officials to issue safety warnings and emergency orders.
As smaller accidents strike communities across the country, fire officials say they fear a major catastrophe. The U.S. Department of Transportation has proposed new regulations on rail worker training, oil composition testing, train speed and tank car construction.
Rail officials say they can manage the shipments on their own with careful route selection, speed control and inspections.
In Texas, where production is booming with the country’s biggest proved reserves and refinery capacity, crude oil rides the rail with little oversight, the Houston Chronicle reported in an in-depth article this week.
OMG! AGW!
/s
Coincidentally, the Regime's pet Billionaire Warren Buffet, is heavily invested in railroads.
Just sayin'
Pipelines are the natural target for all the new ‘citizens’ freely (albeit, ILLEGALLY) entering America across our southern border.
It’s just a matter of time.
Shipping oil by rail is causing delays and increasing costs for other industries shipping raw materials and finished products. Wheat, automobiles, and coal are a few examples.
And who benefits the most? why Warren Buffet of course. Zero doubt he lobbied Jug ears to kill the keystone Pipeline. For some reason all the Business channels revere the guy, not me.
The AAR also reported U.S. Class I railroads originated 119,634 carloads of crude oil in the second quarter of 2014, 8.6 percent more than the first quarter of 2014 and the most ever in any quarter. In the first half of 2014, crude oil accounted for 1.6 percent of total originated carloads for U.S. Class I railroads.
Please note that it explicitly states these carloadings are only originations from Class I railroads. Many crude oil loadouts exist that are NOT directly served by Class I railroads, but shortlines... the "Mom and Pop" railroads of America, if you will.
I really don't know if AAR's data here really includes all CBR originations, just those by UP, BNSF, NS and CSX.
But if delays are caused by increased rail traffic, isn’t that likely issues on a “mainline” and not local feeders?
Year to date carloading for grain is up almost 20% from 2013. Coal is flat (Thanks, Obama). Motor Vehicles and Parts up 5%.
Delays? Look at volume, first.
The revenue these trains generate goes to pay off debt on previous CAPEX projects, and allows for infrastructure improvements. One day the oil boom will end (again) in the Permian Basin... fortunately one client of mine is in a position where they can transload potash... which will sustain the railroad for another 90 years.
Thanks for the info
Excellent chart.
Rail traffic of petroleum products is growing faster than every category besides grain, and is the only category which can be safely transported via pipeline.
The increase in rail traffic transport times(the days it takes to get from point A to point B) has put more pressure on trucks. There is already a shortage of trucks/flatbeds. Therefore, trucking rates have been steadily going up with demand.
The other factor still affecting the lumber/forest products industry is that customers are still using a just in time inventory philosophy. They wait until they a practically out of something before they rebuy it. Then they do not have 3-6 weeks to wait for a railcar to get to them. To some extent, this inventory replacement idea is caused by their reduction in available capital from their banks. If they have a smaller credit line, they can not buy as much inventory, and replace more often. All lumber yards had their credit lines cut during the housing crisis. Many are still operating on these reduced lines.
Not true. Increased intermodal, motor vehicle and grain traffic contributes to delays as well. Railroads, especially BNSF, haven’t dug out of the mess caused by excessive winter weather. Chicago is still a mess for everyone. The railroads, however, are spending billions this year on capacity expansion to deal with it.
Crude-By-Rail (CBR) shipments are booming because it is a cost-effective alternative to non-existent pipelines, and many oil companies are finding it to be superior to building a pipeline because it gives them more flexibility (unit trains can be diverted).
Pipeline capacity will grow in coming years, but railroads will continue to play a role crude oil transportation. A good resource can be found at https://rbnenergy.com/
It's up to railroads to serve their customers and expand their capacity to maintain or improve velocity. However, if the customer all the sudden wants to ship 20% more of their commodity, the silos' tariff agreements will need to be revisited. Same goes for the rest of the categories.
One way or another, crude will move from the field by rail, as pipeline infrastructure is unavailable until it is built... and with this administration, you apparently have a better chance of seeing GOD than seeing Keystone XL built.
You woulda been better served if you had invested in the tank car manuafacturers... After witnessing, firsthand, the ramp up of CBR in Texas and New Mexico, and the millions upon millions of Dollars of Private Capital being invested to improve rail capacity, I picked Greenbrier, buying in at $18/sh. Yesterday it hit $74.38. Next earnings report is at the end of October.
Your mileage may vary.
No I acknowledged grain traffic was growing faster, but I also think that petroleum can be safely and efficiently transported by alternate means whereas the other products and materials on the chart cannot.
My other concern is what happens to rail traffic when coal prices start to move again. Even a small increase in coal traffic will have a big impact.
coal is moved much like crude... in dedicated unit trains... and as you can see there is a LOT moved by rail... but mines are being closed as plants are converted to natural gas... We shall see what happens... not counting on coal as part of a domestic energy plan is insane.
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