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posted on 30 September 2016

Rail Week Ending 24 September 2016: Data Is Mixed

Week 38 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 mixed compared to 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 around 5% - but this week was -4.6%. 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.

It does appear that the downward slide in the one year rolling averages will pause shortly as the rate of increase in the rate of decline is becoming smaller.

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 -5.1 % unchanged accelerating
13 week rolling average -5.5 % decelerating decelerating
52 week rolling average -7.2 % accelerating 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 24, 2016.

For this week, total U.S. weekly rail traffic was 539,609 carloads and intermodal units, down 4.8 percent compared with the same week last year.

Total carloads for the week ending September 24 were 268,524 carloads, down 6.1 percent compared with the same week in 2015, while U.S. weekly intermodal volume was 271,085 containers and trailers, down 3.5 percent compared to 2015.

Four of the 10 carload commodity groups posted an increase compared with the same week in 2015. They included grain, up 13.4 percent to 25,129 carloads; miscellaneous carloads, up 3.6 percent to 10,488 carloads; and chemicals, up 2.3 percent to 30,194 carloads. Commodity groups that posted decreases compared with the same week in 2015 included petroleum and petroleum products, down 20.2 percent to 10,379 carloads; coal, down 13.9 percent to 87,486 carloads; and forest products, down 13.2 percent to 9,928 carloads.

For the first 38 weeks of 2016, U.S. railroads reported cumulative volume of 9,460,059 carloads, down 10.7 percent from the same point last year; and 9,811,598 intermodal units, down 3.2 percent from last year. Total combined U.S. traffic for the first 38 weeks of 2016 was 19,271,657 carloads and intermodal units, a decrease of 7 percent compared to last year.

Coal is over 1/3 of the total railcar count, and this week the EIA says coal production is 11.8 % 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 -6.1 % -3.5 % -4.8 %
Ignoring coal and grain -4.6 %
Year Cumulative to Date -10.7 % -3.2 % -7.0 %

[click on graph below to enlarge]

Current Rail Chart:

z rail1.png

For the week ended September 24, 2016

  • Estimated U.S. coal production totaled approximately 15.7 million short tons (mmst)
  • This production estimate is 2.3% lower than last week's estimate and 11.8% 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 9.8 mmst
  • U.S. year-to-date coal production totaled 523.8 mmst, 22.3% lower than the comparable year-to-date coal production in 2015

Coal production from EIA.gov

Steven Hansen



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