Seeking Alpha

Proposal threatens to aggravate shortage of rail cars to move crude oil

  • Proposed U.S. regulations on hauling flammable liquids threaten to aggravate a shortage of railcars for transporting oil, as thousands of tank cars are likely to be scrapped or redeployed, according to a WSJ report.
  • With production capacity for new tank cars ~35K cars/year and cars ordered today unable to be filled until 2016 at current production rates, industry analysts say the railcar industry could have difficulty expanding production fast enough to accommodate the short time frames proposed by regulators for ushering out older tank cars for transporting flammable liquids.
  • Questions remain about whether there is enough production capacity available to retrofit existing cars or replace them in time to comply with the government's schedule to phase out the older cars.
  • TRN +3.1%, ARII +3.1%, GBX +2.3%, GMT +1.2%, RAIL +0.6%.
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Comments (5)
  • sdavid0419
    , contributor
    Comments (995) | Send Message
     
    In anticipation of this ARII has moved retrofitting out of the production plant into 2 retrofit facilities and using the space plus additional space to increase the production plant size by 1/3 and thus is creating many new skilled labor jobs for which training has already begun. This is America where when the going gets tough the tough get going!!!
    13 Aug 2014, 11:40 AM Reply Like
  • 27975573
    , contributor
    Comments (304) | Send Message
     
    Let's change that last tag line.......

     

    When the politicians get stupid......the capitalists make more money.
    These firms are already benefiting from the Keystone fiasco.....

     

    Long all these suppliers.
    13 Aug 2014, 11:56 AM Reply Like
  • Wallrus St.
    , contributor
    Comments (14) | Send Message
     
    ARII, TRN, RAIL, WAB and GBX --take your pick, ALL will benefit from new regulations. Cramer will be highlighting this story next week-- Grab any one of them before the pop.

     

    13 Aug 2014, 11:58 AM Reply Like
  • brrw@sonic.net
    , contributor
    Comments (90) | Send Message
     
    Howcum TRN's P/E multiple is only 11.25 this morning, vs. industry peers ARII at 15.85, GMT at 14.51, and GBX at a lofty 23.0? (RAIL has recent losses, so no P/E is calculable) ???????? Is Trinity that much riskier, or is the market missing something?
    13 Aug 2014, 12:18 PM Reply Like
  • dcollinson
    , contributor
    Comments (5) | Send Message
     
    Remember this: Supply can't keep up with demand, mergers might take place and Ichan owns over 50% of ARII. I'm betting on ARII Selling out. It will be a great ride to the top.
    13 Aug 2014, 12:33 PM Reply Like
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