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

|By:, SA News Editor

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.

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