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posted on 16 September 2016

Rail Week Ending 10 September 2016: Rolling Averages Generally Weaker

Week 36 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. This week, most rolling averages' were decelerating.

Analyst Opinion of the Rail Data

We review this data set to understand the economy. If coal and grain are removed from the analysis, rail is declining a around 5% (this week 4.9%). Under normal circumstances one should consider this recessionary as trucking tonnages are down also. This illustrates the dangers of using one one sector to gauge the economy - but it does say that a major dynamic change has occurred in the economy that has caused a significant decline in shipping volumes.

The contraction in rail counts began over one year ago, and now rail movements are being compared against weaker 2015 data - and this is the cause periodic 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 -5.8 % decelerating decelerating
13 week rolling average -5.6 % decelerating accelerating
52 week rolling average -7.1 % decelerating decelerating

A summary of the data from the AAR:

The Association of American Railroads (AAR) today reported U.S. rail traffic for the week ending September 10, 2016.

For this week, total U.S. weekly rail traffic was 482,894 carloads and intermodal units, down 5.4 percent compared with the same week last year.

Total carloads for the week ending September 10 were 252,627 carloads, down 6 percent compared with the same week in 2015, while U.S. weekly intermodal volume was 230,267 containers and trailers, down 4.8 percent compared to 2015.

Three of the 10 carload commodity groups posted an increase compared with the same week in 2015. They were grain, up 26.3 percent to 22,599 carloads; miscellaneous carloads, up 16.1 percent to 8,593 carloads; and nonmetallic minerals, up 2 percent to 35,407 carloads. Commodity groups that posted decreases compared with the same week in 2015 included petroleum and petroleum products, down 26.5 percent to 10,452 carloads; coal, down 15.7 percent to 87,058 carloads; and metallic ores and metals, down 4.5 percent to 19,644 carloads.

For the first 36 weeks of 2016, U.S. railroads reported cumulative volume of 8,921,199 carloads, down 11 percent from the same point last year; and 9,272,945 intermodal units, down 3.1 percent from last year. Total combined U.S. traffic for the first 36 weeks of 2016 was 18,194,144 carloads and intermodal units, a decrease of 7.1 percent compared to last year.

Coal is over 1/3 of the total railcar count, and this week the EIA says coal production is 14.5% 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 -6.0 % -4.8 % -5.4 %
Ignoring coal and grain -4.9 %
Year Cumulative to Date -11.0 % -3.1 % -7.1 %

[click on graph below to enlarge]

Current Rail Chart:

z rail1.png

For the week ended September 10, 2016

  • Estimated U.S. coal production totaled approximately 15.1 million short tons (mmst)
  • This production estimate is 6.2% lower than last week's estimate and 14.5% lower than the production estimate in the comparable week in 2015
  • East of the Mississippi River coal production totaled 5.5 mmst
  • West of the Mississippi River coal production totaled 9.6 mmst
  • U.S. year-to-date coal production totaled 485.1 mmst, 24% lower than the comparable year-to-date coal production in 2015

Coal production from EIA.gov

Steven Hansen



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