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posted on 12 May 2017

Rail Week Ending 06 May 2017: A Relatively Good Week

Week 18 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 it IMPROVED 1.7 % (meaning that the predicitive economic elements improved 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 (red line) vs. total movements (blue line):

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 +4.5% accelerating decelerating
13 week rolling average +5.0 % decelerating decelerating
52 week rolling average -1.3 % accelerating accelerating

A summary of the data from the AAR:

For this week, total U.S. weekly rail traffic was 515,305 carloads and intermodal units, up 4.6 percent compared with the same week last year.

Total carloads for the week ending May 6 were 251,182 carloads, up 8 percent compared with the same week in 2016, while U.S. weekly intermodal volume was 264,123 containers and trailers, up 1.6 percent compared to 2016.

Six of the 10 carload commodity groups posted an increase compared with the same week in 2016. They included grain, up 22.2 percent to 21,848 carloads; coal, up 17.7 percent to 73,386 carloads; and metallic ores and metals, up 15.6 percent to 23,743 carloads. Commodity groups that posted decreases compared with the same week in 2016 included petroleum and petroleum products, down 18.5 percent to 9,247 carloads; motor vehicles and parts, down 6.4 percent to 17,160 carloads; and farm products excl. grain, and food, down 1.3 percent to 15,723 carloads.

For the first 18 weeks of 2017, U.S. railroads reported cumulative volume of 4,598,584 carloads, up 6.4 percent from the same point last year; and 4,703,804 intermodal units, up 1.6 percent from last year. Total combined U.S. traffic for the first 18 weeks of 2017 was 9,302,388 carloads and intermodal units, an increase of 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 13.0 % 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 +8.0 % +1.6 % +4.6%
Ignoring coal and grain +1.5 %
Year Cumulative to Date +6.4 % +1.6 % +4.0 %

[click on graph below to enlarge]

z rail1.png

For the week ended May 6, 2017

  • Estimated U.S. coal production totaled approximately 13.3 million short tons (mmst)
  • This production estimate is 3.1% lower than last week's estimate and 13% higher than the production estimate in the comparable week in 2016
  • East of the Mississippi River coal production totaled 5.3 mmst
  • West of the Mississippi River coal production totaled 8 mmst
  • U.S. year-to-date coal production totaled 271.5 mmst, 17.5% higher than the comparable year-to-date coal production in 2016

Coal production from

Steven Hansen

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