Written by Steven Hansen
Week 48 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 problem with the data last week was a holiday mismatch – with last week seeing a significant improvement and this week a significant decline.
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) declined 19.1 % 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 declined from +0.4 % to -2.6 %.
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 the 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 | -7.4 % | worsening |
| 13 week rolling average | -7.4 % | worsening |
| 52 week rolling average | -4.1 % | worsening |
A summary for this week from the AAR:
U.S. railroads originated 955,579 carloads in November 2019, down 7.5 percent, or 77,166 carloads, from November 2018. U.S. railroads also originated 1,019,766 containers and trailers in November 2019, down 7.4 percent, or 81,138 units, from the same month last year. Combined U.S. carload and intermodal originations in November 2019 were 1,975,345, down 7.4 percent, or 158,304 carloads and intermodal units from November 2018.
In November 2019, three of the 20 carload commodity categories tracked by the AAR each month saw carload gains compared with November 2018. These were stone, clay & glass products, up 1,163 carloads or 4.1 percent; all other carloads, up 659 carloads or 2.7 percent; and primary forest products, up 143 carloads or 3.4 percent. Commodities that saw declines in November 2019 from November 2018 included: coal, down 49,419 carloads or 14.5 percent; crushed stone, sand & gravel, down 6,920 carloads or 8.4 percent; and primary metal products, down 5,447 carloads or 15.1 percent.
“Rail traffic continues to struggle because U.S. manufacturing is soft, trade disputes and the uncertainty they entail are ongoing, and economic growth abroad isn’t what it could be,” said AAR Senior Vice President John T. Gray. “That said, we’re confident that rail volumes will begin to grow again as the manufacturing portion of the economy finds firmer footing.”
Excluding coal, carloads were down 27,747 carloads, or 4 percent, in November 2019 from November 2018. Excluding coal and grain, carloads were down 26,887 carloads, or 4.5 percent.
Total U.S. carload traffic for the first 11 months of 2019 was 12,044,302 carloads, down 4.6 percent, or 574,287 carloads, from the same period last year; and 12,741,636 intermodal units, down 4.7 percent, or 635,001 containers and trailers, from last year.
Total combined U.S. traffic for the first 48 weeks of 2019 was 24,785,938 carloads and intermodal units, a decrease of 4.7 percent compared to last year.
Week Ending November 30, 2019
Total U.S. weekly rail traffic was 436,900 carloads and intermodal units, down 23 percent compared with the same week last year.
Total carloads for the week ending November 30 were 215,126 carloads, down 21.3 percent compared with the same week in 2018, while U.S. weekly intermodal volume was 221,774 containers and trailers, down 24.5 percent compared to 2018.
None of the 10 carload commodity groups posted an increase compared with the same week in 2018. Commodity groups that posted decreases compared with the same week in 2018 included coal, down 20,027 carloads, to 67,858; nonmetallic minerals, down 10,328 carloads, to 23,948; and chemicals, down 7,286 carloads, to 27,694.
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 | -21.3 % | -24.5 % | -23.0 % |
| — Ignoring coal, grain & petroleum | -19.1 % | ||
| Year Cumulative to Date | -4.6 % | -4.7 % | -4.7 % |
[click on the graph below to enlarge]
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