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25 Jan 2016

Rail Tidbits for 2016

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Fuel was the big money saver in 2015 and that will continue in 2016.

Diesel prices are expected to remain steady or possibly even lower; some predict the yearly average for diesel will fall below that of regular gas for the first time since 2004. The result of lower oil prices has driven some Class 1 railroads’ fuel surcharge (FSC) to zero over the last twelve months, and, in some cases, the FSC application has been removed altogether.

The good news for shippers is that this will bring lower and more consistent prices for shipments throughout 2016. On another note, amid the fallout from lower oil prices, new orders for energy sector railcar types continue to drop while demand for non-energy related railcars, such as covered hoppers and flat cars, is looking up. This is good news for railcar users who were squeezed out of the market due to energy industry demands.

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