Wed, May 13, 11:24 AM
- The U.S. oil industry is challenging new rules aimed at improving the safety of moving crude oil by rail, as the American Petroleum Institute petitions the U.S. Court of Appeals for the D.C. Circuit to block key provisions of rules unveiled earlier this month.
- The petition seeks to block a requirement that older tank cars be retrofitted with new safety features designed to prevent them from spilling oil or rupturing in a derailment, and challenges a requirement that tank cars be equipped with new electronic braking systems or face operational restrictions.
- Environmental groups say the new rules do not go far enough, and are considering their own legal challenge.
- Relevant tickers: CSX, NSC, UNP, CNI, CP, KSU, BRK.A, BRK.B, GBX, WAB, TRN, ARII, RAIL
Tue, May 5, 5:43 PM
- Norfolk Southern (NYSE:NSC) CEO Wick Moorman says the rail industry will challenge the U.S. government’s new crude-by-rail regulations, worried that the new rules could make shipping crude oil by train prohibitively expensive.
- The Department of Transportation last Friday called for the installation of new braking systems on trains hauling more than 70 cars of crude oil by 2021, a requirement Moorman says took the rail industry by surprise.
- The CEO tells WSJ that the new rules place railroads in a difficult spot because railroads do not own the vast majority of tank cars and thus have no control over whether the costly new brakes are installed; also, the brake requirement is not a mandate for tank car owners, only railroads, he says.
- Moorman says he is sure the industry will challenge the new rules either in court or petition the DoT for reconsideration.
- Relevant tickers: CSX, UNP, CNI, CP, KSU, BRK.A, BRK.B, GBX, WAB, TRN, ARII, RAIL
Fri, May 1, 2:36 PM
- U.S. regulators issue tough new rules for safer transportation of crude oil by trains, introducing a new tank car standard and mandating the use of new braking technology.
- The rules require that the oldest, least safe tank cars be replaced within three years with new cars that have thicker shells, higher safety shields and better fire protection; a later generation of tank cars, built since 2011 with more safety features, will have to be retrofitted or replaced by 2020.
- Regulators are not asking railroads to notify communities of any oil train traffic but will require a “point of contact” for information related to the routing of hazardous materials.
- Shares of tank car makers are higher: GBX +7.2%, WAB +7.4%, TRN +7.4%, ARII +7.2%, RAIL +5.7%.
- Other relevant tickers: CSX, NSC, UNP, CNI, CP, KSU, BRK.A, BRK.B
Tue, Apr. 28, 8:36 AM
Mon, Apr. 27, 12:59 PM
- Declining output from shale oil fields has in turn cut demand for key types of railroad cars, according to new industry figures, in the latest sign of the fallout from lower crude oil prices.
- Buyers ordered 4,470 new railway tank cars during Q1, down 6% Y/Y and ~70% below the nearly 15K tank cars ordered during Q4, according to the Railway Supply Institute trade group.
- Q1 orders for covered “hopper” cars, used mostly to deliver fracking sand to drill sites, also fell to 131 cars from 11.5K a year ago and 8,627 cars during Q4.
- Tank car orders had surged with shale oil output, generally transported to refineries by rail, but output from North Dakota’s Bakken Shale field dropped in both January and February, and the U.S. Energy Department predicts continued declines in output there for April and May.
- Relevant tickers: TRN, ARII, GBX, WAB, CSX, NSC, UNP, CNI, CP, KSU, BRK.A, BRK.B
Wed, Apr. 22, 8:09 AM
Tue, Apr. 21, 5:30 PM
Tue, Apr. 14, 7:38 AM
- A detailed study from Cowen & Company on the railroad industry concludes this year will be one of the most difficult in years.
- Pricing pressure is at the heart of the firm's concerns.
- "Intermodal renewals have been occurring at considerably high rates, and the slight 10-bps decline in overall rail pricing in our survey suggests that non-intermodal pricing may be tempered enough to more than offset the intermodal rate strength," reads the report.
- Norfolk Southern (NYSE:NSC) warned on profit last night, while CSX (NYSE:CSX) reports Q1 earnings tomorrow.
- Railroad stocks: UNP, CNI, ARII, GBX, CP, KSU, WAB, TRN.
Tue, Apr. 7, 10:19 AM
- U.S. rail cars used to haul crude oil need to be significantly strengthened and include more robust thermal protections, the National Transportation Safety Board says.
- "We can’t wait a decade for safer rail cars," NTSB Chairman Christopher Hart says. “The industry needs to make this issue a priority and expedite the safety enhancements, otherwise we continue to put our communities at risk.”
- The cars should be replaced or retrofitted with protective systems better able to withstand fire, including ceramic thermal blankets - already used for tank cars transporting liquefied petroleum gas - to surround the tank and shield it from intense heat should a nearby car catch fire, the NTSB says.
- The NTSB does not have the power to impose new rules on railroads or energy companies, but its recommendations could add pressure to toughen language in a regulations expected to be completed in May that would raise standards for oil tank cars.
- Relevant tickers: GBX, TRN, ARII, RAIL, WAB
Thu, Mar. 12, 8:10 AM
- Canada proposes tough new oil tank car standards and says even improved tank cars coming into service now would have to be off the rails by 2025 at the latest.
- New cars would need thicker tank car walls and an outer cover for thermal protection.
- The announcement comes after a recent series of fiery derailments in Canada and the U.S., including some that involved the newer, improved rail cars, and as more oil increasingly travels by rail due to rising production and a shortage of pipelines.
- The move signals that the U.S. may adopt similar regulations and will increase pressure on the rail car industry to produce enough new cars on a tighter deadline.
- Relevant tickers: CNI, CP, CSX, UNP, KSU, NSC, GWR, BRK.A, BRK.B, GBX, TRN, ARII, RAIL, WAB
Tue, Mar. 10, 7:25 PM
- Canada and the U.S. are "very close" to announcing stronger new oil tanker rail car standards, intended to limit fires and pollution when oil trains derail, Canadian Transport Minister Lisa Raitt says.
- A recent spate of fiery oil tanker accidents, including three derailments in just the past month from Canadian National Railway (NYSE:CNI), has ratcheted up the pressure on both governments to take action.
- Raitt is recommending that Canada's House of Commons transport committee summon CNI to explain its recent accidents.
- Meanwhile, officials from large rail operators met with White House staff last week to argue against the need for electronically controlled pneumatic brakes, saying they would be costly and not add significant safety benefits.
- Other relevant tickers: CP, CSX, UNP, KSU, NSC, GWR, BRK.A, BRK.B, GBX, TRN, ARII, RAIL, WAB
Wed, Feb. 18, 11:09 AM
- The crude oil train that derailed and exploded Monday in West Virginia consisted of modern tanker cars the rail industry had been hailed as safe, complicating the debate over proposed federal rules intended to make crude-by-rail transport safer.
- One proposed version of the rules requires using the same CPC-1232 tanker cars that exploded in West Virginia, while another version requires a stronger tank car.
- "We think we can reduce the magnitude of these incidents, in part with a safer tank car,” says an exec at tanker car maker Greenbrier (NYSE:GBX), but orders were slow so far because leasing companies were waiting for the final federal rule.
- Other rail car makers include TRN, ARII, RAIL, WAB.
Wed, Feb. 18, 8:00 AM
Tue, Feb. 17, 5:30 PM
Tue, Feb. 3, 8:09 AM
Mon, Feb. 2, 9:54 AM
- Demand on railroads to transport crude oil on long trains is on the decline as an oversupply of tank cars and lower production in the energy industry both play a factor.
- Data highlighted by Reuters suggests lease rates for oil rail cars declined to $1,300 near the end of last month after being as high as $2,450 close to a year ago.
- The number of long trains specializing in crude that are sidelined due to inactivity has increased, according to market watchers.
- Railroad stocks: UNP, NSC, CSX, CNI, ARII, GBX, CP, KSU, CNI, WAB, TRN.
WAB vs. ETF Alternatives
Westinghouse Air Brake Technologies Corp is a provider of value-added, technology-based products and services for the rail industry. It provides its products and services through two main business segments, the Freight and Transit.
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