Written by Steven Hansen
Week 36 of 2019 shows same week total rail traffic (from same week one year ago) contracted according to the Association of American Railroads (AAR) traffic data. The economically intuitive sectors rolling averages remain in contraction – and worsened this week.
Analyst Opinion of the Rail Data
We review this data set to understand the economy. The intuitive sectors (total carloads removing coal, grain, and petroleum) contracted 4.1 % year-over-year for this week. We primarily use rolling averages to analyze the intuitive data due to weekly volatility – and the 4 week rolling year-over-year average for the intuitive sectors worsened from -2.9 % to -3.9 %.
When rail contracts, it suggests a slowing of the economy.
The following graph compares the four-week moving averages for carload economically intuitive sectors (red line) vs. total movements (blue line):
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Intermodal transport (containers or trailers on rail cars) growth was relatively strong until the beginning of 2019 – and now the year-to-date growth is deep in contraction.
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 change from the rolling average of one year ago | Trend Direction | |
| 4 week rolling average | -5.5 % | slowing |
| 13 week rolling average | -5.4 % | improving |
| 52 week rolling average | -2.1 % | slowing |
A summary for this week from the AAR:
For this week, total U.S. weekly rail traffic was 469,285 carloads and intermodal units, down 6.6 percent compared with the same week last year.
Total carloads for the week ending September 7 were 238,988 carloads, down 5.6 percent compared with the same week in 2018, while U.S. weekly intermodal volume was 230,297 containers and trailers, down 7.5 percent compared to 2018.
Three of the 10 carload commodity groups posted an increase compared with the same week in 2018. They were chemicals, up 1,425 carloads, to 30,888; miscellaneous carloads, up 42 carloads, to 8,674; and petroleum and petroleum products, up 1 carload, to 11,653. Commodity groups that posted decreases compared with the same week in 2018 included coal, down 5,965 carloads, to 79,446; grain, down 2,589 carloads, to 17,431; and nonmetallic minerals, down 2,524 carloads, to 32,734.
For the first 36 weeks of 2019, U.S. railroads reported cumulative volume of 9,110,692 carloads, down 3.4 percent from the same point last year; and 9,558,740 intermodal units, down 4 percent from last year. Total combined U.S. traffic for the first 36 weeks of 2019 was 18,669,432 carloads and intermodal units, a decrease of 3.7 percent compared to last year.
The middle row in the table below removes coal, grain, and petroleum from the changes in the railcar counts as these commodities are not economically intuitive.
| This Week | Carloads | Intermodal | Total |
| This week Year-over-Year | -5.6 % | -7.6 % | -6.6 % |
| — Ignoring coal, grain & petroleum | -4.1 % | ||
| Year Cumulative to Date | -3.4 % | -4.0 % | -3.7 % |
[click on the graph below to enlarge]
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