April 13, 2020 - PFLPetroleum Report -
North American rail volumes declined 8.0% year over year in March compared to the 6.6% year over year decrease in February. March’s volumes were -11.7% compared to -8.4% in February. Volumes were negatively impacted by accelerating declines in intermodal volumes that we attribute to COVID-19.
The outlook has deteriorated significantly over the past month, as intensifying efforts to slow the spread of COVID-19 (quarantine orders, non-essential business shutdowns, etc.) have led to a sharp reduction in economic activity. Additionally, the collapse in oil prices has led to a much weaker outlook for crude-by-rail previously a bright spot.
In a press release last week by the AAR stated that they have not witnessed such sustained declines of carloads at the current level since the Great Recession. AAR’s Senior Vice President, John Gray, said:
"Since 1988, when our data begin, total U.S. rail carloads were lower than they were last week only during a few Christmas’s and New Year's weeks, when rail operations are seasonally low." He went on to state that: "Part of the problem now is sustained weakness in coal carloads, but even excluding coal, carloads last week were down 13.1 percent."
North American rail volumes were down 16.1% year over year in week 14 (U.S. -15.9%, Canada -15.1%, Mexico -23.0%), resulting in year to date volumes that are down 6.7% (U.S. -8.1%, Canada -3.7%, Mexico +0.3%). 10 of the AAR's 11 major traffic categories posted year over year declines with the largest decreases coming from intermodal (-15.5%), motor vehicles & parts (-82.6%), coal (-22.5%) and nonmetallic minerals (-17.6%).
In the East, CSX’s total volumes were down 15.2%, with the largest decreases coming from motor vehicles & parts (-78.8%), coal (-32.0%) and intermodal (-9.9%). NS’s total volumes were down 25.5%, with the largest decreases coming from intermodal (-20.8%), coal (-41.7%) and motor vehicles & parts (-87.2%).
In the West, BN’s total volumes were down 13.7%, with the largest decreases coming from intermodal (-15.3%), motor vehicles & parts (-69.4%), coal (-11.8%), stone sand & gravel (-35.9%) and petroleum (-18.0%). UP’s total volumes were down 18.4%, with the largest decreases coming from intermodal (-19.0%), motor vehicles & parts (-74.8%), coal (-25.3%), stone sand & gravel (-26.6%) and petroleum (-28.8%).
In Canada, CN’s total volumes were down 15.8% with the largest decreases coming from intermodal (-12.4%), motor vehicles & parts (-83.1%), petroleum (-20.0%), stone sand & gravel (-36.7%) and coal (-20.3%). RTMs were down 10.3%. CP’s total volumes were down 15.5%, with the largest decreases coming from intermodal (-14.0%), motor vehicles & parts (-67.5%), stone sand & gravel (-67.1%) and petroleum (-23.1%). RTMs were down 13.0%.
KCS’s total volumes were down 9.4% , with the largest decreases coming from intermodal (-14.5%) and motor vehicles & parts (-83.8%).
North American Rig count is down 68 rigs week over week with the U.S. losing 62 rigs and Canada losing 6 rigs week over week. Year over year we are down 451 Rigs collectively. Cuts in drilling continue as oil and gasoline demand continues to decline and storage continues to fill. Canada now only has 31 rigs nationwide operating and the U.S 602 expect continued declining rig counts.
North American Rig Count Summary
Source: Baker Hughes
North American rail volumes declined 8.0% year over year in March compared to the 6.6% year over year decrease in February. March’s volumes were -11.7% compared to -8.4% in February. Volumes were negatively impacted by accelerating declines in intermodal volumes that we attribute to COVID-19.
The outlook has deteriorated significantly over the past month, as intensifying efforts to slow the spread of COVID-19 (quarantine orders, non-essential business shutdowns, etc.) have led to a sharp reduction in economic activity. Additionally, the collapse in oil prices has led to a much weaker outlook for crude-by-rail previously a bright spot.
In a press release last week by the AAR stated that they have not witnessed such sustained declines of carloads at the current level since the Great Recession. AAR’s Senior Vice President, John Gray, said:
"Since 1988, when our data begin, total U.S. rail carloads were lower than they were last week only during a few Christmas’s and New Year's weeks, when rail operations are seasonally low." He went on to state that: "Part of the problem now is sustained weakness in coal carloads, but even excluding coal, carloads last week were down 13.1 percent."
North American rail volumes were down 16.1% year over year in week 14 (U.S. -15.9%, Canada -15.1%, Mexico -23.0%), resulting in year to date volumes that are down 6.7% (U.S. -8.1%, Canada -3.7%, Mexico +0.3%). 10 of the AAR's 11 major traffic categories posted year over year declines with the largest decreases coming from intermodal (-15.5%), motor vehicles & parts (-82.6%), coal (-22.5%) and nonmetallic minerals (-17.6%).
In the East, CSX’s total volumes were down 15.2%, with the largest decreases coming from motor vehicles & parts (-78.8%), coal (-32.0%) and intermodal (-9.9%). NS’s total volumes were down 25.5%, with the largest decreases coming from intermodal (-20.8%), coal (-41.7%) and motor vehicles & parts (-87.2%).
In the West, BN’s total volumes were down 13.7%, with the largest decreases coming from intermodal (-15.3%), motor vehicles & parts (-69.4%), coal (-11.8%), stone sand & gravel (-35.9%) and petroleum (-18.0%). UP’s total volumes were down 18.4%, with the largest decreases coming from intermodal (-19.0%), motor vehicles & parts (-74.8%), coal (-25.3%), stone sand & gravel (-26.6%) and petroleum (-28.8%).
In Canada, CN’s total volumes were down 15.8% with the largest decreases coming from intermodal (-12.4%), motor vehicles & parts (-83.1%), petroleum (-20.0%), stone sand & gravel (-36.7%) and coal (-20.3%). RTMs were down 10.3%. CP’s total volumes were down 15.5%, with the largest decreases coming from intermodal (-14.0%), motor vehicles & parts (-67.5%), stone sand & gravel (-67.1%) and petroleum (-23.1%). RTMs were down 13.0%.
KCS’s total volumes were down 9.4% , with the largest decreases coming from intermodal (-14.5%) and motor vehicles & parts (-83.8%).
North American Rig count is down 68 rigs week over week with the U.S. losing 62 rigs and Canada losing 6 rigs week over week. Year over year we are down 451 Rigs collectively. Cuts in drilling continue as oil and gasoline demand continues to decline and storage continues to fill. Canada now only has 31 rigs nationwide operating and the U.S 602 expect continued declining rig counts.
North American Rig Count Summary
Source: Baker Hughes