sample - alltranstek€¦ · small aggregate oth 2001 -2400 cuf source: ftr, alltranstek have the...

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AUGUST 2017 CLOSER LOOK SERIES: Open Top Hoppers

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The North American Open Top Hopper (OTH) fleet totaled x cars as of January 2017, down from x in 2013, a x% reduction.

The Coal OTH fleet is the largest fleet segment, totaling x cars, which represent x% of the overall OTH fleet. Coal OTHs are further divided into three primary groups: Aluminum Coal, Steel Coal, and Hybrid Coal.

The remaining OTHs fall into the Other OTH segment, which totals x cars, or x% of the fleet. The Other OTH segment is further segmented based on cubic capacity ranges and tonnage capacity.

Total carloads in OTH have decreased over the last ten years at a x% AAGR.

The largest user of OTHs, the mining industry, generated x carloads, or x% of all OTH traffic, in 2016.

Coal, the primary commodity for the OTH fleet, generated over x carloads in 2016, or x% of all OTH traffic.

Retirements of OTH averaged about x cars per year between 1998 and 2007. As a result of declining coal shipments retirements have increased to about x per year since the 2008 recession.

The surplus grew from x in 2014 to x cars in 2016 while fleet utilization fell from x% to x%. The surplus currently stands at x cars.

The OTH fleet has an average age of x years, with the majority of younger cars skewed toward the more recently built Aluminum and Hybrid Coal segments.

Railroads own the largest portion of the OTH fleet, with a x% ownership share. Leasing companies and shippers own x% and x%, respectively.

New OTH deliveries totaled x cars in 2016, nearly twice the total deliveries in 2014, x cars. Deliveries are projected to increase slightly over the 2017-2021 period, averaging x cars per year.

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Mining Petrochemical Forest Products Transportation Manufacturing Metal

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OTH Traffic by Industry Segment2016 Carloadings

Source: STB Waybill, FTR, AllTranstek; x carloads

Miningx%

Petrochemicalx%

Otherx%

Industry TrafficOpen Top Hopper


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Aluminum/Hybrid Coal

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Steel Coal OTH

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OTH Traffic by Equipment Type2016 Carloadings


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CHARACTERISTICS. The Small Aggregate OTH fleet seg-

ment totals x cars, accounting for x% of the overall OTH fleet and about x% of the Other OTH fleet.

CAPACITY. These cars have cubic footage capacity of 2001-2400 cuf. About x% have 2300 cuf capacity, x% are 2190-2200, x% at 2100-2110 cuf, and x% are have 2400 cuf capacity.

About x% of Small Aggregate OTHs have 263k Grl capaci-ty, while x% are 286k Grl. The remaining cars are rated at 268k Grl at x%, and 220 Grl or 70 Ton at x%.

70Tx%

263kx%

286kx%

Fleet DemographicsSmall Aggregate OTH 2001-2400 cuf

Source: Umler, AllTranstek; x cars

AGE. The Small Aggregate OTH fleet segment has an av-erage age of x years. The median car is x-years-old, hav-ing been built in 19xx.

About x% of this fleet is younger than x-years-old.

OWNERSHIP. The railroads own the majority share of this fleet, with x%, or more than x cars.

Shippers own x% and lessors account for the x% rest of this fleet, or x and x cars, respectively.

CSXT owns the largest railroad share, as well as the larg-est overall share of this fleet, with x% and x%, respective-ly, or x cars.

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Age ProfileSmall Aggregate OTH 2001-2400 cuf

Source: Umler, AllTranstek, x cars

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Total traffic for the Small Aggregate OTH fleet was x carloads in 2016.

Since 2007, loadings in these cars have dropped dramatically from almost x carloads in 2007 to x carloads in 2016, at a x% AAGR, or an overall decline of x%.

Unit train shipments were still high for the Small Aggre-gate OTH fleet, at x%. However, only x% of shipment vol-ume moved in 100+ car unit trains. The 75-99 car unit trains and 50-74 car unit trains represented x% and x%, respectively.

Crushed Stonex%

Phosphate Rockx%

Sandx%

Iron Concentrates

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Gravel x%

Otherx%

Commodity TrafficSmall Aggregate OTH 2001-2400 cuf

Source: STB Waybill, FTR; AllTranstek; x carloads

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Norfolk Southern

CSXT

BNSF

Union Pacific

Canadian National

CP Rai l

Kansas City Southern

Class II/III R ailroads

Wells Fargo R ail

Trinity Ind.

CIT Rail

GATX Rail

SMBC R ail

Small Lessors

Shippers

Ownership ProfileSmall Agg. OTH 2001-2400 cuf

Source: Umler, AllTranstek, x cars

Railroadsx%

Lessorsx%Shippers

x%

Fleet OwnershipSmall Aggregate OTH 2001-2400 cuf

Source: Umler, AllTranstek; x cars

The next largest railroad share is owned by Norfolk Southern with x cars, or x% of the total Small Aggregate OTH fleet.

The Class II/III railroads combine for x% of this fleet, or x cars.

Wells Fargo Rail owns the largest lessor share with x%, or about x cars. GATX follows closely with x%, or nearly x cars.

The Other small leasing companies combined own x% of this fleet, or x cars.

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The Aggregate OTH car seg-ment consists of cars built

specifically for crushed stone and other aggregate ser-vices. The Small Aggregate car is considered to be 2001 to 2400 cuf in size, which represents mostly the signifi-cant configurations that historically entered service for the transportation of aggregates. It also carved a dis-tinct niche for the transportation of phosphate rock.

Aggregate hoppers are in tight supply/demand balance, spurring new car construction over the last several years, and for which domestic infrastructure investment holds additional promise. This creates new demand for the Large Aggregate OTHs.

Lessor participation in the this segment is limited, so lease fleets are not a likely source for equipment.

Class I Railroadx%

Class II/III Railroad

x%

Shipperx%

New Delivery Owner ProfileSmall Aggregate OTH 2001-2400 cuf

Source: 2012-2017 Umler, AllTranstek

Multiple car units of 2-24 cars accounted for x% while shipments made in shuttle train service of 25-49 cars were x%. Less than x% of traffic moves in single car ser-vice.

In 2007, trips per year averaged x for this fleet. This aver-age dropped to x in 2009. Since then, it increased very slowly each year to an average of x in 2015, before drop-ping slightly to a x average in 2016.

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Traffic by IndustrySmall Aggregate OTH 2001-2400 cuf

Other Mining AAGR

Source: STB Waybill, AllTranstek

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Single Car

Multip le Car 2-24 cars

Shuttle Train 25 -49 cars

Unit 50-74 cars

Unit Train 75-99 cars

Unit Train 100+ cars

Shipment SizeSmall Aggregate OTH 2001-2400 cuf

Source: STB Waybill, FTR, AllTranstek, x carloads

The Small Aggregate OTH fleet saw high replacement

demand over the 2006-2008 period. However, since then new car deliveries have almost disappeared.

This fleet only saw x new Small Aggregate OTH delivered over the 2013-2016 period, while about x cars were re-tired. This resulted in a x% fleet decline from x in January 2013 to x in the same month of 2017.

Retirements in the Small Aggregate OTH fleet over 2017-2021 are projected to total x cars.

Deliveries for the 2017-2021 period are expected to total about x cars, with a build-to-retirement ratio of x to 1.

A x% fleet decline, at x% AAGR, is expected for the fore-cast period, with a 2021 year end fleet total of x cars.

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Jan '13 Fleet

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Fleet Growth 2013-2022Small Aggregate OTH 2001-3400 cuf

Source: UMLER, FTR, AllTranstek

Car supply for this fleet has remained stable since before the recession unlike traffic which declined greatly during the recession. Traffic has since leveled out but a surplus of cars exists due to decreased utilization.

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Car Demand Pressure IndexSmall Agg. OTH 2001-2400 cuf

Trips Per Year Fleet Size CarloadsSource: Umler, STB Waybill, AllTranstek

Fleet Size and Carloads Indexed

to 2001

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New Car DeliveriesSmall Aggregate OTH 2001-2400 cuf

Source: FTR, AllTranstek

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RetirementsSmall Aggregate OTH 2001-2400 cuf

Source: FTR, AllTranstek

have the potential to be quite disruptive to the affected users. While most new Aggregate car builds will likely consist of the Large Aggregate hopper, there may be some opportunities for new additions among the Small Aggregate cars. The prospects for a dearth of available cars for reassignment by lessors, is likely to mean that that lease rates and equipment values for the cars should remain strong.

One thing to watch is the fact that there is modal compe-tition from trucking within this segment. Rail movement advantages typically require high volume, moderate dis-tance moves. Since aggregates are produced within all regions of the continental United States, rail usage can often be challenged.

Aggregate OTHs have a no-table potential for growth,

and are considered to be in tight supply. Construction, particularly with respect to roads and other infrastruc-ture projects, has favorable prospects, which should con-tinue to benefit the segment, particularly with respect to the Large Aggregate hoppers that have become the pri-mary type for new construction. Competition among les-sors for this business is strong, although some shippers continue to purchase equipment as well.

The consumption of aggregates has trended in a positive direction. Domestic infrastructure development has the potential to expand aggregate use, particularly for road construction and stone consuming projects of that na-ture. The small aggregate OTHs have the potential to re-main in very strong demand, particularly because of the upcoming prospects for high age related retirements within the existing fleet. In fact, age-related retirements

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sample - alltranstek€¦ · small aggregate oth 2001 -2400 cuf source: ftr, alltranstek have the...

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