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posted on 05 August 2016

Rail Week Ending 30 July 2016: Month Down 7.9%, Week Down 4.9% Year-over-Year

Week 30 of 2016 shows same week total rail traffic (from same week one year ago) contracted according to the Association of American Railroads (AAR) traffic data. The 13 week rolling averages' contraction continues to moderate - but the four and 52 week rolling averages continue to degrade.

The contraction began over one year ago, and now rail movements are being compared against weaker 2015 data - and this is the cause some acceleration in the short term rolling averages. Still, rail is weak to very week compared to previous years.

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 (carloads and intermodal combined).

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 -8.0 % accelerating decelerating
13 week rolling average -7.0 % accelerating accelerating
52 week rolling average -6.6 % 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 July 2016.

Carload traffic in July totaled 1,025,367 carloads, down 8.8 percent or 99,530 carloads from July 2015. U.S. railroads also originated 1,002,401 containers and trailers in July 2016, down 6.9 percent or 74,482 units from the same month last year. For July 2016, combined U.S. carload and intermodal originations were 2,027,768, down 7.9 percent or 174,012 carloads and intermodal units from July 2015.

In July 2016, four of the 20 carload commodity categories tracked by the AAR each month saw carload gains compared with July 2015. These included: grain, up 15.3 percent or 12,641 carloads; waste and nonferrous scrap, up 25.9 percent or 3,400 carloads; and miscellaneous carloads, up 12.9 percent or 2,880 carloads. Commodities that saw declines in July 2016 from July 2015 included: coal, down 17.5 percent or 70,479 carloads; petroleum and petroleum products, down 22 percent or 11,926 carloads; and crushed stone, gravel and sand, down 11.6 percent or 11,765 carloads.

Excluding coal, carloads were down 4 percent or 29,051 carloads in July 2016 from July 2015.

Total U.S. carload traffic for the first 30 weeks of 2016 was 7,320,583 carloads, down 11.9 percent or 986,109 carloads, while intermodal containers and trailers were 7,715,404 units, down 2.8 percent or 221,538 containers and trailers when compared to the same period in 2015. For the first seven months of 2016, total rail traffic volume in the United States was 15,035,987 carloads and intermodal units, down 7.4 percent or 1,207,647 carloads and intermodal units from the same point last year.

"Rail traffic continues to reflect the uncertainty rail customers face in a challenging economic environment," said AAR Senior Vice President of Policy and Economics John T. Gray, who noted rail intermodal remained off from 2015's record traffic level while carloads showed a small improvement in coal and a bit of an improvement in grain. "For the present, railroads are focused on providing safe and efficient service to their customers, while watching to see if the increase in consumer spending in the second quarter will lead to additional Gross Domestic Product growth in the second half of the year."

Week Ending July 30, 2016

Total U.S. weekly rail traffic for the week ending July 30, 2016 was 536,916 carloads and intermodal units, down 4 percent compared with the same week last year.

Total carloads for the week ending July 30 were 274,355 carloads, down 5.3 percent compared with the same week in 2015, while U.S. weekly intermodal volume was 262,561 containers and trailers, down 2.6 percent compared to 2015.

Four of the 10 carload commodity groups posted an increase compared with the same week in 2015. They included miscellaneous carloads, up 16.7 percent to 10,839 carloads; grain, up 14.9 percent to 24,677 carloads; and chemicals, up 3.1 percent to 31,025 carloads. Commodity groups that posted decreases compared with the same week in 2015 included petroleum and petroleum products, down 25 percent to 10,383 carloads; coal, down 12.2 percent to 90,330 carloads; and forest products, down 8.1 percent to 10,329 carloads.

Coal is over 1/3 of the total railcar count, and this week is 11.0 % lower than the production estimate in the comparable week in 2015. 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 -5.3 % -3.6 % -4.0 %
Ignoring coal and grain -4.3 %
Year Cumulative to Date -11.9 % -2.8 % -7.4 %

[click on graph below to enlarge]

Current Rail Chart:

z rail1.png

For the week ended July 30, 2016

  • Estimated U.S. coal production totaled approximately 16.1 million short tons (mmst)
  • This production estimate is 7.7% higher than last week's estimate and 11% lower than the production estimate in the comparable week in 2015
  • East of the Mississippi River coal production totaled 5.9 mmst
  • West of the Mississippi River coal production totaled 10.2 mmst
  • U.S. year-to-date coal production totaled 389.9 mmst, 25.8% lower than the comparable year-to-date coal production in 2015

Coal production from

Steven Hansen

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