Week 13 of 2018 shows same week total rail traffic (from same week one year ago) improved according to the Association of American Railroads (AAR) traffic data. The rolling averages growth rates were mixed.
Analyst Opinion of the Rail Data
We review this data set to understand the economy. If coal and grain are removed from the analysis for carloads, this week it expanded 1.5 %. We primarily use rolling averages the analyze the data due to weekly volatility – and the rolling averages declined.
Intermodal transport growth remains strong year-over-year.
The following graph compares the four week moving averages for carload economically intuitive sectors (red line) vs. total movements (blue line):
Although rail’s growth rate is improving – it has yet to show that the economy is getting ready for a growth spurt.
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 | +3.5 % | unchanged | decelerating |
| 13 week rolling average | +1.2 % | accelerating | accelerating |
| 52 week rolling average | +2.8 % | little changed | decelerating |
A summary of the data from the AAR:
U.S. railroads originated 1,050,653 carloads in March 2018, up 3.6 percent, or 36,157 carloads, from March 2017. U.S. railroads also originated 1,082,239 containers and trailers in March 2018, up 6.5 percent, or 66,151 units, from the same month last year. Combined U.S. carload and intermodal originations in March 2018 were 2,132,892, up 5 percent, or 102,308 carloads and intermodal units from March 2017.
In March 2018, 10 of the 20 carload commodity categories tracked by the AAR each month saw carload gains compared with March 2017. These included: coal, up 24,867 carloads or 7.9 percent; chemicals, up 7,492 carloads or 5.9 percent; and crushed stone, sand & gravel, up 7,124 carloads or 8 percent. Commodities that saw declines in March 2018 from March 2017 included: nonmetallic minerals, down 3,563 carloads or 19.5 percent; motor vehicles & parts, down 2,257 carloads or 3.2 percent; and coke, down 1,423 carloads or 8.1 percent.
“Railroads are a derived-demand industry,” said AAR Senior Vice President of Policy and Economics John T. Gray. “Their level of business depends to a large degree on what’s happening elsewhere in the economy. There’s always some economic uncertainty — today that involves, among other things, trade relations, commodity prices, and what the Fed will do about interest rates — but economic signals today are mostly positive. Rail traffic in March was largely positive too, at least in terms of traffic segments that are most sensitive to what’s going on in the economy.”
Excluding coal, carloads were up 11,290 carloads, or 1.6 percent, in March 2018 from March 2017. Excluding coal and grain, carloads were up 11,042 carloads, or 1.8 percent.
Total U.S. carload traffic for the first three months of 2018 was 3,296,199 carloads, down 0.3 percent, or 9,027 carloads, from the same period last year; and 3,496,381 intermodal units, up 5.5 percent, or 181,304 containers and trailers, from last year.
Total combined U.S. traffic for the first 13 weeks of 2018 was 6,792,580 carloads and intermodal units, an increase of 2.6 percent compared to last year.
Week Ending March 31, 2018
Total U.S. weekly rail traffic was 534,751 carloads and intermodal units, up 2.8 percent compared with the same week last year.
Total carloads for the week ending March 31 were 265,470 carloads, up 2.8 percent compared with the same week in 2017, while U.S. weekly intermodal volume was 269,281 containers and trailers, up 2.8 percent compared to 2017.
Eight of the 10 carload commodity groups posted an increase compared with the same week in 2017. They included coal, up 4,004 carloads, to 82,740; chemicals, up 1,497 carloads, to 33,691; and grain, up 803 carloads, to 24,002. Commodity groups that posted decreases compared with the same week in 2017 were farm products excl. grain, and food, down 263 carloads, to 15,927; and petroleum and petroleum products, down 176 carloads, to 9,906.
Coal is over 1/3 of the total railcar count, and this week the EIA says coal production is 3.1 % higher than the production estimate in the comparable week in 2017.
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 | +2.8 % | +2.8 % | +2.8 % |
| Ignoring coal and grain | +1.5 % | ||
| Year Cumulative to Date | -0.3 % | +5.5 % | +2.6 % |
[click on graph below to enlarge]
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For the week ended March 31, 2018
- Estimated U.S. coal production totaled approximately 14.7 million short tons (mmst)
- This production estimate is 4.9% lower than last week’s estimate and 3.1% higher than the production estimate in the comparable week in 2017
- East of the Mississippi River coal production totaled 6 mmst
- West of the Mississippi River coal production totaled 8.7 mmst
- U.S. year-to-date coal production totaled 191.1 mmst, 3% lower than the comparable year-to-date coal production in 2017
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![[click on graph below to enlarge]](/images/z%20rail1.png?v=36){kind=link}