Written by Steven Hansen
Week 50 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 have recovered, container exports from the U.S. remain deep in contraction. This week again intermodal continued in expansion year-over-year and continues on a strengthening trendline.
Carloads are still in contraction year-over-year this week – but nearing positive territory.
But overall because of the strength of intermodal, rail is growing year-over-year.
We review this data set to understand the economy. The intuitive sectors (total carloads removing coal, grain, and petroleum) contracted 4.4 % 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 -3.3 % to -3.7 %
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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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 | +4.0 % | improving |
| 13 week rolling average | +2.1 % | worsening |
| 52 week rolling average | -7.9 % | improving |
A summary for this week from the AAR:
For this week, total U.S. weekly rail traffic was 546,209 carloads and intermodal units, up 4.9 percent compared with the same week last year.
Total carloads for the week ending December 12 were 238,193 carloads, down 2.2 percent compared with the same week in 2019, while U.S. weekly intermodal volume was 308,016 containers and trailers, up 11.1 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 7,613 carloads, to 28,390; chemicals, up 1,679 carloads, to 32,591; and farm products excl. grain, and food, up 525 carloads, to 15,978. Commodity groups that posted decreases compared with the same week in 2019 included coal, down 8,651 carloads, to 63,777; petroleum and petroleum products, down 2,252 carloads, to 11,485; and metallic ores and metals, down 1,854 carloads, to 20,765.
For the first 50 weeks of 2020, U.S. railroads reported cumulative volume of 10,863,948 carloads, down 13.3 percent from the same point last year; and 12,946,162 intermodal units, down 2.6 percent from last year. Total combined U.S. traffic for the first 50 weeks of 2020 was 23,810,110 carloads and intermodal units, a decrease of 7.8 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 | -2.2 % | +11.1 % | +4.9 % |
| — Ignoring coal, grain & petroleum | -4.4 % | ||
| Year Cumulative to Date | -13.3 % | -2.6 % | -7.8 % |
[click on the graph below to enlarge]
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