Here’s my rub today for the rail industry. Get your cars cleaned as soon as you can, but we both know you will wait, like everyone else, and then the price will spike due to deadlines. In approx. 4 months, 10 of our customers are holding off on cleaning approx 3000 cars that need to be finished and cleared by their Lessor before year end.
I don’t care what your company’s name is or if your the largest E&P entity in the world, your price to clean your rail cars will be increasingly higher in 4 months as there are not enough tank cleaners that can do good volume and clean 3000 rail cars to the lessors specifications in two months collectively.
We know your losing $250mm a quarter and cleaning your crude cars for a return to the Lessor is the last thing on your mind of your boss/executives. But, remember you will have rust and corrosion for the most part and that is a battle that will have to be fought in the tank and with your Lessor per the terms of your lease. Most leases read “removal of residue” and do not mention rust and corrosion, but do you want to take that chance too. We already know CIT, UTLX, GATX are in lawsuits with good customers over no real stated inspection procedures (black light/white glove maybe) per the AAR or FRA. It’s, does your clean match my clean and that is really how you will work it out with your Lessor. But will you have the time and the budget to pay more and possibly battle with your Lessor over tank cars not being cleaned properly to their standards. We will soon find out..
Knowing this, good companies with great rail departments like Tesoro and Tauber are getting out in front of this impending tsunami and we applaud them for this.
Our hope is that you follow their lead and don’t get behind the eight ball as the year comes to a close as the longer you wait the more cost and issues you shall have my friends.
Good luck to those who do not take this as gospel 🙂
Keep’em clean everybody!
*And we didn’t even mention the BLTs and valve/gasket repairs!