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posted on 02 July 2015

Rail Week Ending 27 June 2015: Just Another Bad Month for Rail

Econintersect: Week 25 of 2015 shows same week and same month total rail traffic (from same week and month one year ago) contracted according to the Association of American Railroads (AAR) traffic data. Intermodal traffic expanded year-over-year, which accounts for half of movements - but weekly railcar counts continues in contraction. It should be noted that the level of contraction worsened from the previous week.

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 -0.9% accelerating decelerating
13 week rolling average -1.9% decelerating decelerating
52 week rolling average +2.4% 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 June 2015 and the first six months of 2015.

Carload traffic in June totaled 1,087,066 carloads, down 7.7 percent or 91,016 carloads from June 2014. U.S. railroads also originated 1,117,149 containers and trailers in June 2015, up 3.7 percent or 39,797 units from the same month last year. For June 2015, combined U.S. carload and intermodal originations were 2,204,215, down 2.3 percent or 51,219 carloads and intermodal units from June 2014.

In June 2015, six of the 20 carload commodity categories tracked by the AAR each month saw carload gains compared with June 2014. This included motor vehicles and parts, up 4.7 percent or 3,379 carloads; grain, up 3 percent or 2,208 carloads; and coke, up 7.1 percent or 1,089 carloads. Commodities that saw declines in June 2015 from June 2014 included coal, down 17.4 percent or 76,752 carloads; primary metal products, down 13.9 percent or 6,160 carloads; and petroleum and petroleum products, down 7.3 percent or 4,373 carloads.

Excluding coal, carloads were down 1.9 percent or 14,264 carloads in June 2015 from June 2014.

Total U.S. carload traffic for the first six months of 2015 was 6,930,568 carloads, down 3.8 percent or 271,831 carloads, while intermodal containers and trailers were 6,605,029 units, up 2.3 percent or 149,442 containers and trailers when compared to the same period in 2014. For the first six months of 2015, total rail traffic volume in the United States was 13,535,597 carloads and intermodal units, down 0.9 percent or 122,389 carloads and intermodal units from the same point last year.

"Recent declines in rail carload traffic, especially coal, shouldn't detract from the tremendous improvements we've been seeing in intermodal," said AAR Senior Vice President Policy and Economics John T. Gray. "The growth in rail intermodal is one of America's best transportation-related success stories. June 2015 was the highest-volume rail intermodal month in history for U.S. railroads, and 2015 will almost certainly set another annual record, breaking the record set last year."

Week Ending June 27, 2015

Total U.S. weekly rail traffic for the week ending June 27, 2015 was 547,969 carloads and intermodal units, down 2.8 percent compared with the same week last year. For the week there were 272,405 carloads, down 8.9 percent compared with the same week in 2014, while U.S. weekly intermodal volume was 275,564 containers and trailers, up 4.1 percent compared to 2014.

Two of the 10 carload commodity groups posted increases compared with the same week in 2014. They are: grain, up 5.9 percent to 19,046 carloads and motor vehicles and parts, up 2.9 percent to 18,828. Commodity groups that posted decreases compared with the same week in 2014 included: coal, down 19.2 percent to 90,654 carloads; petroleum and petroleum products, down 13.4 percent to 13,759 carloads; and metallic ores and metals, down 7.5 percent to 26,296 carloads.

North American rail volume for the week ending June 27, 2015 on 13 reporting U.S., Canadian and Mexican railroads totaled 370,251 carloads, down 7.3 percent compared with the same week last year, and 346,709 intermodal units, up 3.9 percent compared with last year. Total combined weekly rail traffic in North America, was 716,960 carloads and intermodal units, down 2.2 percent. North American rail volume for the first 25 weeks of 2015 was 17,667,389 carloads and intermodal units, down 0.1 percent compared with 2014.

Coal is over 1/3 of the total railcar count, and this week is 12.2% 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 -8.9 % +4.1 % -2.8 %
Ignoring coal and grain -4.7 %
Year Cumulative to Date -3.8 % +2.3 % -0.9 %

[click on graph below to enlarge]

Current Rail Chart:

z rail1.png

From EIA.gov:

For the week ended June 20, 2015:

  • Estimated U.S. coal production totaled approximately 16.3 million short tons (mmst)
  • This production estimate is 6.0% higher than last week's estimate and 12.2% lower than the production estimate in the comparable week in 2014
  • East of the Mississippi River coal production totaled 6.8 mmst
  • West of the Mississippi River coal production totaled 9.5 mmst
  • U.S. year-to-date coal production totaled 425.7 mmst, 8.5% lower than the comparable year-to-date coal production in 2014

Steven Hansen



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