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posted on 05 May 2017

Rail Week Ending 29 April 2017: April's Total Movements Up 5.2% Year-over-Year

Week 17 of 2017 shows same week total rail traffic (from same week one year ago) improved according to the Association of American Railroads (AAR) traffic data. The economically intuitive sectors again declined.

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 1.4 % (meaning that the predicitive economic elements declined year-over-year). Also consider rail movements are below 2015 levels - even though they are above 2016 levels.

The following graph compares the rail economically intuitive sectors vs. total movements:

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 [including coal and grain] 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 +5.2 % unchanged decelerating
13 week rolling average +5.0 % decelerating accelerating
52 week rolling average -1.3 % accelerating accelerating

A summary of the data from the AAR:

U.S. railroads originated 1,023,300 carloads in April 2017, up 8.4 percent, or 78,949 carloads, over April 2016. U.S. railroads also originated 1,052,001 containers and trailers in April 2017, up 2.3 percent, or 23,448 units, from the same month last year. Combined U.S. carload and intermodal originations in April 2017 were 2,075,301, up 5.2 percent or 102,397 carloads and intermodal units over April 2016.

In April 2017, 10 of the 20 carload commodity categories tracked by the AAR each month saw carload gains compared with April 2016. These included: coal, up 26.7 percent or 65,158 carloads; grain, up 18.7 percent or 14,612 carloads; and crushed stone, sand and gravel, up 12.9 percent or 11,777 carloads. Commodities that saw declines in April 2017 from April 2016 included: petroleum and petroleum products, down 13.1 percent or 5,929 carloads; motor vehicles and parts, down 9.1 percent or 6,777 carloads; and metallic ores, down 8.4 percent or 2,083 carloads.

"U.S. grain car loadings during April 2017 were the highest since 2011, with rail grain deliveries to ports since the first of the year running 19 percent ahead of 2016," said AAR Senior Vice President of Policy and Economic John T. Gray. "These agricultural exports improve our balance of trade and strengthen the farm economy.

"Sales of motor vehicles fell for the second straight month in April as financing companies have reportedly hit the brakes, tightening lending standards following the satisfaction of the pent-up demand coming out of the 2009 recession. As a result, rail shipments of motor vehicles and parts fell again in April. We are hopeful that the upcoming summer buying season will clear dealer inventories and drive up demand for railroads to deliver new vehicles."

Excluding coal, carloads were up 2 percent, or 13,791 carloads, in April 2017 over April 2016.

Total U.S. carload traffic for the first four months of 2017 was 4,347,402 carloads, up 6.4 percent, or 259,614 carloads, from the same period last year; and 4,439,681 intermodal units, up 1.6 percent, or 71,425 containers and trailers, from last year.

Total combined U.S. traffic for the first 17 weeks of 2017 was 8,787,083 carloads and intermodal units, an increase of 3.9 percent compared to last year.

Week Ending April 29, 2017

Total U.S. weekly rail traffic was 527,830 carloads and intermodal units, up 5.1 percent compared with the same week last year.

Total carloads for the week ending April 29 were 258,476 carloads, up 6 percent compared with the same week in 2016, while U.S. weekly intermodal volume was 269,354 containers and trailers, up 4.2 percent compared to 2016.

Four of the 10 carload commodity groups posted an increase compared with the same week in 2016. They included grain, up 18.3 percent to 23,784 carloads; coal, up 17.7 percent to 75,662 carloads; and nonmetallic minerals, up 15.2 percent to 40,660 carloads. Commodity groups that posted decreases compared with the same week in 2016 included petroleum and petroleum products, down 12.9 percent to 9,624 carloads; motor vehicles and parts, down 12.1 percent to 16,677 carloads; and farm products excl. grain, and food, down 3.9 percent to 15,603 carloads.

Coal is over 1/3 of the total railcar count, and this week the EIA says coal production is 27.1 % higher than the production estimate in the comparable week in 2016.

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 % +4.2 % +5.1 %
Ignoring coal and grain -1.4 %
Year Cumulative to Date +6.4 % +1.6 % +3.9 %

[click on graph below to enlarge]

z rail1.png

For the week ended April 29, 2017

  • Estimated U.S. coal production totaled approximately 13.8 million short tons (mmst)
  • This production estimate is 1.7% lower than last week's estimate and 27.1% higher than the production estimate in the comparable week in 2016
  • East of the Mississippi River coal production totaled 5.4 mmst
  • West of the Mississippi River coal production totaled 8.4 mmst
  • U.S. year-to-date coal production totaled 258.2 mmst, 17.6% higher than the comparable year-to-date coal production in 2016

Coal production from

Steven Hansen

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