Week Ending 02June2012: Coal Headwinds Continue to Effect Rail Traffic

June 8th, 2012
in econ_news

Econintersect: Week 22 of 2012 ending 02 June 2012 shows same week rail traffic again declined over 2011 levels according to data released by the American Association of Railroads (AAR). Excluding coal which is not an economic indicator, rail is expanding 3.4% same week year-over-year.

The main reason for this decline was due to coal shipments.

Thirteen of the 20 commodity categories tracked by the AAR saw carload gains in May 2012 compared with May 2011, including: motor vehicles, up 17,066 cars or 27.7 percent; petroleum and petroleum products, up 16,460 carloads, or 49.2 percent; crushed stone, sand and gravel, up 7,535 carloads, or 8.2 percent; lumber and wood products, up 2,357 carloads, or 16.9 percent, and primary metal products, up 2,260 carloads, or 4.3 percent.

Follow up:

A good background article on the switch of the power generating plants from coal to natural gas was published 30May2012 in the NYT.  The week before GEI News had reported on the darmitc decline in coal usage over the past year.

The majority of the reason for rail contraction is coal movements - which would only effect the profitability of railroads, and not an economic indicator as coal is an alternative fuel to oil and natural gas - U.S. production of those are up sharply in recent months. This week rail growth was moderately positive when coal was removed from the calculation


This Week
Carloads Intermodal Total
This week Year-over-Year -3.1% 4.1% -2.3%
This week without coal
Year Cumulative to Date -3.1% 2.9% -2.3%



Note that the total (cumulative) year-to-date traffic is contracting year-over-year.

Steven Hansen

Source: AAR

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