Written by Steven Hansen
Week 36 of 2020 shows same week total rail traffic (from same week one year ago) grew according to the Association of American Railroads (AAR) traffic data. Total rail traffic has been mostly in contraction for over one year – and now is recovering from a coronavirus pandemic.
Analyst Opinion of the Rail Data
This week’s improvement was mostly due to a holiday mismatch.
Total rail traffic has two components – carloads and intermodal (containers or trailers on rail cars). Container exports from China are now recovering, container exports from the U.S. declined and remains deep in contraction. This week again intermodal continued in expansion year-over-year and continues on a strengthening trendline.
However, carloads remain deep in contraction.
We review this data set to understand the economy. The intuitive sectors (total carloads removing coal, grain, and petroleum) contracted 5.3 % year-over-year for this week [11.2 % for the previous 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 improved from -11.8 % to -9.8 %.
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):
Intermodal transport growth was weak and in contraction in 2019.
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 | -2.3 % | improving |
13 week rolling average | -8.0 % | improving |
52 week rolling average | -10.2 % | improving |
A summary for this week from the AAR:
For this week, total U.S. weekly rail traffic was 509,637 carloads and intermodal units, up 8.6 percent compared with the same week last year.
Total carloads for the week ending September 5 were 222,298 carloads, down 6.9 percent compared with the same week in 2019, while U.S. weekly intermodal volume was 287,339 containers and trailers, up 24.8 percent compared to 2019.
Five of the 10 carload commodity groups posted an increase compared with the same week in 2019. They included grain, up 5,630 carloads, to 23,003; motor vehicles and parts, up 1,729 carloads, to 16,296; and miscellaneous carloads, up 1,306 carloads, to 10,038. Commodity groups that posted decreases compared with the same week in 2019 included coal, down 18,495 carloads, to 60,842; nonmetallic minerals, down 3,159 carloads, to 29,585; and metallic ores and metals, down 2,396 carloads, to 17,634.
For the first 36 weeks of 2020, U.S. railroads reported cumulative volume of 7,670,555 carloads, down 15.8 percent from the same point last year; and 8,897,816 intermodal units, down 6.9 percent from last year. Total combined U.S. traffic for the first 36 weeks of 2020 was 16,568,371 carloads and intermodal units, a decrease of 11.3 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 | -6.9 % | +24.8 % | +8.6 % |
— Ignoring coal, grain & petroleum | -5.3 % | ||
Year Cumulative to Date | -15.8 % | -6.9 % | -11.3 % |
[click on the graph below to enlarge]
z rail1.png
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