Written by Steven Hansen
Week 39 of 2020 shows same week total rail traffic (from same week one year ago) declined 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 slowly recovering from the coronavirus pandemic.
Analyst Opinion of the Rail Data
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.
But overall, rail is on an improving trendline.
We review this data set to understand the economy. The intuitive sectors (total carloads removing coal, grain, and petroleum) contracted 11.2 % 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 was unchanged at -9.5 %.
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 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 | -1.5 % | improving |
| 13 week rolling average | -5.8 % | improving |
| 52 week rolling average | -10.1 % | improving |
A summary for this week from the AAR:
For this week, total U.S. weekly rail traffic was 518,290 carloads and intermodal units, down 2.1 percent compared with the same week last year.
Total carloads for the week ending September 26 were 224,146 carloads, down 10.5 percent compared with the same week in 2019, while U.S. weekly intermodal volume was 294,144 containers and trailers, up 5.5 percent compared to 2019.
Three of the 10 carload commodity groups posted an increase compared with the same week in 2019. They were grain, up 7,061 carloads, to 24,995; farm products excluding grain, and food, up 464 carloads, to 15,666; and motor vehicles and parts, up 421 carloads, to 16,340. Commodity groups that posted decreases compared with the same week in 2019 included coal, down 21,008 carloads, to 58,220; nonmetallic minerals, down 5,357 carloads, to 29,977; and chemicals, down 2,937 carloads, to 30,078.
For the first 39 weeks of 2020, U.S. railroads reported cumulative volume of 8,335,530 carloads, down 15.5 percent from the same point last year; and 9,747,872 intermodal units, down 6.2 percent from last year. Total combined U.S. traffic for the first 39 weeks of 2020 was 18,083,402 carloads and intermodal units, a decrease of 10.7 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 | -10.6 % | +5.5 % | -2.1 % |
| — Ignoring coal, grain & petroleum | -11.2 % | ||
| Year Cumulative to Date | -15.5 % | -6.2 % | -10.7 % |
[click on the graph below to enlarge]
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