Railcars

Crude-by-rail has had a huge impact on the market for tank cars.  Currently there are 53,000 tank cars on back order and more orders are coming in. That’s up from a backlog of 48,000 just a couple of months ago. The tank car manufactures are enjoying every bit of it but for the first time since the ethanol boom, they can’t keep up. In the old days it took 9 months to deliver a new car. Now, there is such a backlog that manufacturers can’t deliver a new car for 24 - 30 months.  Today we will review the rapidly evolving tank car situation based on a recent presentation made by Travis Brock from Strobel Starostka, a construction and rail services firm deeply involved in in the crude-by-rail markets.

RBN blog pages are replete with discussions of the Shale–Rail revolution.  We’ve shown how rail has become a formidable competitor to pipeline transportation.  Twice as much crude oil moves by rail out of the Bakken versus pipe.  Almost 100 new rail terminals will be built during 2012-13.  But that’s not the only impact that shale is having.  Most of the vast quantities of materials that support shale drilling arrive by rail.  Among these are proppants (sand, ceramics), pipe, lubricating chemicals, and water.  Today we examine the other end of the shale-rail revolution – the inbound material supply chain.