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posted on 12 January 2017

Rail Week Ending 07 January 2017: Bad Start to 2017

Week 1 of 2017 shows same week total rail traffic (from same week one year ago) declined according to the Association of American Railroads (AAR) traffic data.

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 over the last 6 months been declining around 5% - but this week declined 22.2 %.

This week's data again may have been caused by a mismatch 2017 and 2016 - even so, it is not clear to me why this week's data is so soft. The rolling averages declined. As coal production had a major improvement year-over-year, it is confusing why rail is down.

We have to wait until next week to discover if the improving trend line is in play.

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 +4.2 % accelerating decelerating
13 week rolling average -1.0 % decelerating decelerating
52 week rolling average -5.1 % 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 January 7, 2017.

For this week, total U.S. weekly rail traffic was 441,417 carloads and intermodal units, down 11.4 percent compared with the same week last year.

Total carloads for the week ending January 7 were 221,146 carloads, down 7.7 percent compared with the same week in 2016, while U.S. weekly intermodal volume was 220,271 containers and trailers, down 14.9 percent compared to 2016.

Two of the 10 carload commodity groups posted an increase compared with the same week in 2016. They were metallic ores and metals, up 5.4 percent to 20,403 carloads; and grain, up 0.9 percent to 21,476 carloads. Commodity groups that posted decreases compared with the same week in 2016 included petroleum and petroleum products, down 32.1 percent to 8,903 carloads; farm products excl. grain, and food, down 18.4 percent to 13,802 carloads; and forest products, down 15.3 percent to 9,034 carloads.

For the first week of 2017, U.S. railroads reported cumulative volume of 221,146 carloads, down 7.7 percent from the same point last year; and 220,271 intermodal units, down 14.9 percent from last year. Total combined U.S. traffic for the first week of 2017 was 441,417 carloads and intermodal units, a decrease of 11.4 percent compared to last year.

Coal is over 1/3 of the total railcar count, and this week the EIA says coal production is 19.6 % higher 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 -7.7 % -14.9 % -11.4 %
Ignoring coal and grain -22.2 %
Year Cumulative to Date -7.7 % -14.9 % -11.4 %

[click on graph below to enlarge]

z rail1.png

For the week ended January 7, 2017

  • Estimated U.S. coal production totaled approximately 13.8 million short tons (mmst)
  • This production estimate is 11.1% higher than last week's estimate and 19.6% higher than the production estimate in the comparable week in 2016
  • East of the Mississippi River coal production totaled 5.5 mmst
  • West of the Mississippi River coal production totaled 8.3 mmst
  • U.S. year-to-date coal production totaled 13.8 mmst, 5% higher than the comparable year-to-date coal production in 2016

Coal production from EIA.gov

Steven Hansen



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