Written by Steven Hansen
Week 41 of 2020 shows same week total rail traffic (from the same week one year ago) improved 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. remains deep in contraction. This week again intermodal continued in expansion year-over-year and continues on a strengthening trendline.
However, carloads remain 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 6.3 % 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 improved from -9.5 % to -7.6
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 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] ).
| Percent current rolling average change from the rolling average of one year ago | Trend Direction | |
| 4 week rolling average | -0.3 % | improving |
| 13 week rolling average | -4.3 % | improving |
| 52 week rolling average | -9.8 % | improving |
A summary for this week from the AAR:
For this week, total U.S. weekly rail traffic was 520,452 carloads and intermodal units, up 1.9 percent compared with the same week last year.
Total carloads for the week ending October 10 were 230,964 carloads, down 5.2 percent compared with the same week in 2019, while U.S. weekly intermodal volume was 289,488 containers and trailers, up 8.4 percent compared to 2019.
Six of the 10 carload commodity groups posted an increase compared with the same week in 2019. They included grain, up 6,531 carloads, to 27,434; motor vehicles and parts, up 810 carloads, to 16,103; and miscellaneous carloads, up 655 carloads, to 10,030. Commodity groups that posted decreases compared with the same week in 2019 included coal, down 11,610 carloads, to 62,229; nonmetallic minerals, down 5,053 carloads, to 30,479; and petroleum and petroleum products, down 2,438 carloads, to 10,259.
For the first 41 weeks of 2020, U.S. railroads reported cumulative volume of 8,798,767 carloads, down 15 percent from the same point last year; and 10,323,848 intermodal units, down 5.5 percent from last year. Total combined U.S. traffic for the first 41 weeks of 2020 was 19,122,615 carloads and intermodal units, a decrease of 10.1 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 | -5.2 % | +8.4 % | +1.9 % |
| — Ignoring coal, grain & petroleum | -6.3 % | ||
| Year Cumulative to Date | -15.0 % | -5.5 % | -10.1 % |
[click on the graph below to enlarge]
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