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posted on 09 June 2017

Rail Week Ending 03 June 2017: Movements Up 6.4% in May

Week 22 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 contracted.

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 EXPANDED 6.7 % % (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. This week the one year rolling averages have returned to expansion after contraction beginning in late 2015.

The following graph compares the rail economically intuitive sectors (red line) vs. total movements (blue line) which is in public territory:

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 +6.9 % decelerating accelerating
13 week rolling average +6.1 % decelerating accelerating
52 week rolling average +0.2 % accelerating accelerating

A summary of the data from the AAR:

U.S. railroads originated 1,286,075 carloads in May 2017, up 8.4 percent, or 99,290 carloads, over May 2016. U.S. railroads also originated 1,339,417 containers and trailers in May 2017, up 4.6 percent, or 58,665 units, from the same month last year. Combined U.S. carload and intermodal originations in May 2017 were 2,625,492, up 6.4 percent or 157,955 carloads and intermodal units over May 2016.

"All things considered, May was a good month for rail traffic," said AAR Senior Vice President John T. Gray. "Thirteen of the 20 commodity categories we track had higher carloads in May 2017 than in May 2016, including the four biggest categories — coal, chemicals, crushed stone and sand, and grain. Excluding coal, carloads in May were up 4.1%, their biggest monthly increase in more than two years, and May was the best intermodal month of the year."

In May 2017, 11 of the 20 carload commodity categories tracked by the AAR each month saw carload gains compared with May 2016. These included: coal, up 19.6 percent or 64,059 carloads; grain, up 24.5 percent or 22,963 carloads; and crushed stone, sand and gravel, up 15.3 percent or 17,416 carloads. Commodities that saw declines in May 2017 from May 2016 included: petroleum and petroleum products, down 16.5 percent or 9,365 carloads; primary forest products, down 12.1 percent or 742 carloads; and motor vehicles and parts, down 3.8 percent or 3,419 carload.

Excluding coal, carloads were up 4.1 percent, or 35,231 carloads, in May 2017 over May 2016.

Total U.S. carload traffic for the first five months of 2017 was 5,633,477 carloads, up 6.8 percent, or 358,904 carloads, from the same period last year; and 5,779,098 intermodal units, up 2.3 percent, or 130,090 containers and trailers, from last year.

Week Ending June 3, 2017

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.

For this week, total U.S. weekly rail traffic was 500,192 carloads and intermodal units, up 9.8 percent compared with the same week last year.

Total carloads for the week ending June 3 were 252,853 carloads, up 12.7 percent compared with the same week in 2016, while U.S. weekly intermodal volume was 247,339 containers and trailers, up 7 percent compared to 2016.

Seven of the 10 carload commodity groups posted an increase compared with the same week in 2016. They included grain, up 22.5 percent to 22,838 carloads; coal, up 21.5 percent to 82,523 carloads; and nonmetallic minerals, up 19.2 percent to 35,850 carloads. Commodity groups that posted decreases compared with the same week in 2016 were petroleum and petroleum products, down 5.5 percent to 9,183 carloads; miscellaneous carloads, down 4.6 percent to 8,615 carloads; and motor vehicles and parts, down 1.4 percent to 15,195 carloads.

For the first 22 weeks of 2017, U.S. railroads reported cumulative volume of 5,633,477 carloads, up 6.8 percent from the same point last year; and 5,779,098 intermodal units, up 2.3 percent from last year. Total combined U.S. traffic for the first 22 weeks of 2017 was 11,412,575 carloads and intermodal units, an increase of 4.5 percent compared to last year.

Coal is over 1/3 of the total railcar count, and this week the EIA says coal production is 23.7 % 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 +12.7 % +7.0 % +9.8%
Ignoring coal and grain +6.7 %
Year Cumulative to Date +6.8 % +2.3 % +4.5 %

[click on graph below to enlarge]

z rail1.png

For the week ended June 3, 2017

  • Estimated U.S. coal production totaled approximately 15 million short tons (mmst)
  • This production estimate is about the same as last week's estimate and 23.7% higher than the production estimate in the comparable week in 2016
  • East of the Mississippi River coal production totaled 6 mmst
  • West of the Mississippi River coal production totaled 9 mmst
  • U.S. year-to-date coal production totaled 329.3 mmst, 17.7% higher than the comparable year-to-date coal production in 2016

Coal production from

Steven Hansen

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