Todd Tranausky was posed with the question, "Can railcar recover without a significant increase in utilization?"
This Q&A response from the FTR experts came from the January 2021 State of Freight webinar, Preparing for 2021. View the key takeaways below and then leave a comment at the bottom to let us know what you think.
- Commodities like coal and frac sand are unlikely to rebound which will continue to apply downward pressure on utilization for open-top hoppers and small cube covered hoppers
- Open-top hoppers are an older fleet with companies looking for the right time to retire or write down the fleet but scrap prices haven't been favorable to this point as many of these cars will never turn another loaded mile.
- Small cube covered hoppers are younger and have the potential to be put back into usage with sand if diesel prices reach a point where drilling resumes at a higher level. They could also serve as a replacement opportunity for cement transport as the cement fleets are an older fleet.
- An infrastructure bill could increase utilization for Small cube covered hoppers with higher cement demand as well as upward pressure on diesel prices due to more vehicles moving goods.