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posted on 23 September 2016

Rail Week Ending 17 September 2016: Data Looks Better This Week

Week 37 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. However, the data was an improvement over last week.

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 has recently been declining a around 5% - but this week was a significant improvement to -1.6%. Under normal circumstances one should consider this recessionary as trucking tonnages are down also. This also correlates to the contraction in manufacturing and the wholesale sectors - so rail is not an outlier.

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 -5.4 % accelerating accelerating
13 week rolling average -5.5 % accelerating accelerating
52 week rolling average -7.2 % 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 17, 2016.

For this week, total U.S. weekly rail traffic was 537,904 carloads and intermodal units, down 5.1 percent compared with the same week last year.

Total carloads for the week ending September 17 were 270,336 carloads, down 5.3 percent compared with the same week in 2015, while U.S. weekly intermodal volume was 267,568 containers and trailers, down 4.9 percent compared to 2015.

Three of the 10 carload commodity groups posted an increase compared with the same week in 2015. They were miscellaneous carloads, up 21.2 percent to 11,104 carloads; farm products excl. grain, and food, up 4.9 percent to 16,544 carloads; and chemicals, up 1 percent to 30,723 carloads. Commodity groups that posted decreases compared with the same week in 2015 included petroleum and petroleum products, down 17.4 percent to 11,633 carloads; forest products, down 13 percent to 10,013 carloads; and coal, down 12.5 percent to 90,369 carloads.

For the first 37 weeks of 2016, U.S. railroads reported cumulative volume of 9,191,535 carloads, down 10.8 percent from the same point last year; and 9,540,513 intermodal units, down 3.2 percent from last year. Total combined U.S. traffic for the first 37 weeks of 2016 was 18,732,048 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 11.2 % 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 % -4.9 % -5.1 %
Ignoring coal and grain -1.6 %
Year Cumulative to Date -10.8 % -3.2 % -7.1 %

[click on graph below to enlarge]

Current Rail Chart:

z rail1.png

For the week ended September 17, 2016

  • Estimated U.S. coal production totaled approximately 16.1 million short tons (mmst)
  • This production estimate is 6.6% higher than last week's estimate and 11.2% lower than the production estimate in the comparable week in 2015
  • East of the Mississippi River coal production totaled 5.8 mmst
  • West of the Mississippi River coal production totaled 10.3 mmst
  • U.S. year-to-date coal production totaled 501.2 mmst, 23.7% lower than the comparable year-to-date coal production in 2015

Coal production from EIA.gov

Steven Hansen



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