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posted on 04 June 2015

Rail Week Ending 30 May 2015: Contraction Further Worsens On Rolling Averages. May 2015 Month Totals Show Contraction Year-over-Year.

Econintersect: Week 21 of 2015 shows same week total rail traffic (from same week one year ago) declined according to the Association of American Railroads (AAR) traffic data. Intermodal traffic improved year-over-year, which accounts for half of movements - but weekly railcar counts continues deep into contraction. A quote from the AAR data release:

The degree to which coal carloads have fallen has been a surprise, and the relative weakness in other carload categories is a sign that the economy is probably not yet in bounce-back mode after a dismal first quarter.

This analysis is looking for clues in the rail data to show the direction of economic activity - and is not necessarily looking for clues of profitability of the railroads. The weekly data is fairly noisy, and the best way to view it is to look at the rolling averages which generally are in a weak growth cycle.

Percent current rolling average is larger than the rolling average of one year ago Current quantities accelerating or decelerating Current rolling average accelerating or decelerating compared to the rolling average one year ago
4 week rolling average -4.6% decelerating decelerating
13 week rolling average -1.1% decelerating decelerating
52 week rolling average +2.9% decelerating decelerating

A summary of the data from the AAR:

The Association of American Railroads (AAR) today reported weekly U.S. rail traffic, as well as volumes for May 2015 and the first five months of 2015.

Carload traffic in May totaled 1,074,285 carloads, down 9.4 percent or 111,539 carloads from May 2014. U.S. railroads also originated 1,085,968 containers and trailers in May 2015, up 3.8 percent or 40,057 units from the same month last year. This is the first month on record that container and trailer traffic exceeded carloads. For May 2015, combined U.S. carload and intermodal originations were 2,160,253, down 3.2 percent or 71,482 carloads and intermodal units from May 2014.

In May 2015, five of the 20 carload commodity categories tracked by the AAR each month saw carload gains compared with May 2014. This included motor vehicles and parts, up 4.5 percent or 3,207 carloads; waste and nonferrous scrap, up 3.8 percent or 519 carloads; and grain mill products, up 1.3 percent or 480 carloads. Commodities that saw declines in May 2015 from May 2014 included coal, down 17.4 percent or 77,992 carloads; primary metal products, down 17.9 percent or 8,058 carloads; and grain, down 6.2 percent or 5,027 carloads.

Excluding coal, carloads were down 4.5 percent or 33,547 carloads in May 2015 from May 2014 and when both coal and grain are excluded, U.S. carloads were down 4.3 percent or 28,520 carloads last month.

Total U.S. carload traffic for the first five months of 2015 was 5,844,411 carloads, down 3 percent or 179,906 carloads, while intermodal containers and trailers were 5,487,880 units, up 2 percent or 109,645 containers and trailers when compared to the same period in 2014. For the first five months of 2015, total rail traffic volume in the United States was 11,332,291 carloads and intermodal units, down 0.6 percent or 70,261 carloads and intermodal units from the same point last year.

"Mixed signals is a good term to use to describe the economy nowadays, and it applies to rail traffic too. Intermodal is on its way to another record-breaking year, but carload traffic is not doing well," said AAR Senior Vice President Policy and Economics John T. Gray. "The degree to which coal carloads have fallen has been a surprise, and the relative weakness in other carload categories is a sign that the economy is probably not yet in bounce-back mode after a dismal first quarter."

Week Ending May 30, 2015

Total U.S. weekly rail traffic for the week ending May 30, 2015 was 505,543 carloads and intermodal units, down 4.9 percent compared with the same week last year. For the week there were 258,373 carloads, down 10.7 percent compared with the same week in 2014, while U.S. weekly intermodal volume was 247,170 containers and trailers, up 2.1 percent compared to 2014.

Four of the 10 carload commodity groups posted increases compared with the same week in 2014. They were: miscellaneous carloads, up 6.1 percent to 7,610 carloads; motor vehicles and parts, up 5.3 percent to 17,140; and farm products and food, up 4.2 percent to 16,108. Commodity groups that saw decreases during this one week included: coal, down 21.8 percent to 88,025 carloads; metallic ores and metals, down 12.9 percent to 24,020 carloads; and forest products, down 8.1 percent to 10,858 carloads.

North American rail volume for the week ending May 30, 2015 on 13 reporting U.S., Canadian and Mexican railroads totaled 350,395 carloads, down 11.2 percent compared with the same week last year, and 322,970 intermodal units, up 3.4 percent compared with last year. Total combined weekly rail traffic in North America was 673,365 carloads and intermodal units, down 4.8 percent. North American rail volume for the first 21 weeks of 2015 was 14,795,666 carloads and intermodal units, up 0.4 percent compared with 2014.

Coal is over 1/3 of the total railcar count, and this week is 20.7% lower than the production estimate in the comparable week in 2014. The middle row in the table below removes coal and grain from the changes in the railcar counts as neither of these commodities is economically intuitive.

This Week Carloads Intermodal Total
This week Year-over-Year -10.7 % +2.1 % -4.9 %
Ignoring coal and grain -4.6 %
Year Cumulative to Date -3.0 % +2.0 % -0.6 %

[click on graph below to enlarge]

Current Rail Chart:

z rail1.png

From EIA.gov:

For the week ended May 30, 2015:

  • Estimated U.S. coal production totaled approximately 15.1 million short tons (mmst)
  • This production estimate is 6.1% lower than last week's estimate and 20.7% lower than the production estimate in the comparable week in 2014
  • East of the Mississippi River coal production totaled 6.3 mmst
  • West of the Mississippi River coal production totaled 8.8 mmst
  • U.S. year-to-date coal production totaled 378.9 mmst, 7.5% lower than the comparable year-to-date coal production in 2014

Steven Hansen



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