Week 43 of 2017 shows same week total rail traffic (from same week one year ago) barely improved according to the Association of American Railroads (AAR) traffic data. The economically intuitive sectors remain in expansion,
Analyst Opinion of the Rail Data
We review this data set to understand the economy. If coal and grain are removed from the analysis, this week it improved 1.8 % (meaning that the predicitive economic elements improved year-over-year). This week the one year rolling averages continue in expansion for the 22nd week after contraction beginning in late 2015.
The strength this week (and this year) continues to be intermodal intermodal – which is economically positive (and is contrary to the slowness of the economically intuitive carload counts).
The following graph compares the four week moving averages for the rail economically intuitive sectors (red line) vs. total movements (blue line): Rail’s intuitive sectors have been bouncing around the zero growth line for most of 2017.
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 | +3.0 % | decelerating | decelerating |
| 13 week rolling average | +2.1 % | decelerating | decelerating |
| 52 week rolling average | +3.6 % | accelerating | unchanged |
A summary of the data from the AAR:
U.S. railroads originated 1,065,777 carloads in October 2017, down 0.1 percent, or 1,220 carloads, from October 2016. U.S. railroads also originated 1,144,157 containers and trailers in October 2017, up 6.4 percent, or 68,328 units, from the same month last year. Combined U.S. carload and intermodal originations in October 2017 were 2,209,934, up 3.1 percent, or 67,108 carloads and intermodal units from October 2016.
In October 2017, 12 of the 20 carload commodity categories tracked by the AAR each month saw carload gains compared with October 2016. These included: crushed stone, sand & gravel, up 15,873 carloads or 16.5 percent; chemicals, up 7,390 carloads or 6.4 percent; and metallic ores, up 4,076 carloads or 20.6 percent. Commodities that saw declines in October 2017 from October 2016 included: coal, down 17,764 carloads or 4.9 percent; grain, down 12,528 carloads or 11.8 percent; and motor vehicles & parts, down 5,190 carloads or 7 percent.
“Year-over-year U.S. rail carloads in October were held back by declines in carloads of grain and coal,” said AAR Senior Vice President John T. Gray. “However, carloads of these commodities tend to rise or fall for reasons that have little to do with the state of the economy. Excluding them, carloads were up 4.8% in October, their best monthly gain in almost three years. As such, rail carloads, as well as record intermodal volume in October, support the view that the economy is doing somewhat better now than it has been in the past two years.”
Excluding coal, carloads were up 16,544 carloads, or 2.3 percent, in October 2017 from October 2016. Excluding coal and grain, carloads were up 29,072 carloads, or 4.8 percent.
Total U.S. carload traffic for the first 10 months of 2017 was 11,172,437 carloads, up 3.4 percent, or 368,102 carloads, from the same period last year; and 11,576,709 intermodal units, up 3.7 percent, or 417,112 containers and trailers, from last year.
Total combined U.S. traffic for the first 43 weeks of 2017 was 22,749,146 carloads and intermodal units, an increase of 3.6 percent compared to last year.
Week Ending October 28, 2017
Total U.S. weekly rail traffic was 546,582 carloads and intermodal units, up 0.2 percent compared with the same week last year.
Total carloads for the week ending October 28 were 263,064 carloads, down 3.2 percent compared with the same week in 2016, while U.S. weekly intermodal volume was 283,518 containers and trailers, up 3.7 percent compared to 2016.
Four of the 10 carload commodity groups posted an increase compared with the same week in 2016. They included nonmetallic minerals, up 3,661 carloads, to 40,659; metallic ores and metals, up 3,360 carloads, to 23,244; and chemicals, up 482 carloads, to 30,028. Commodity groups that posted decreases compared with the same week in 2016 included coal, down 9,850 carloads, to 83,597; grain, down 2,626 carloads, to 22,589; and farm products excl. grain, and food, down 1,362 carloads, to 16,509.
Coal is over 1/3 of the total railcar count, and this week the EIA says coal production is 7.1 % lower 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 | -3.2 % | +3.7 % | +0.2% |
| Ignoring coal and grain | +1.8 % | ||
| Year Cumulative to Date | +3.4 % | +3.7 % | +3.6% |
[click on graph below to enlarge]
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For the week ended October 28, 2017
- Estimated U.S. coal production totaled approximately 14.5 million short tons (mmst)
- This production estimate is 3.1% lower than last week’s estimate and 7.1% lower 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 9 mmst
- U.S. year-to-date coal production totaled 650 mmst, 9.9% higher than the comparable year-to-date coal production in 2016
Coal production from EIA.gov
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![[click on graph below to enlarge]](/images/z%20rail1.png?v=36){kind=link}