Written by Steven Hansen
Week 10 of 2021 shows the 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 although economic intuitive sectors are not doing well.
Analyst Opinion of the Rail Data
Shortly, we will see great rail growth as the data is being compared to the coronavirus lockdown period last year.
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 4-week rolling average is in expansion when compared to the 4-week rolling average one year ago but the economic intuitive sectors remain in contraction.
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 6.0 % 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 -13.0 % to -12.3 %
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 | +0.7 % | improving |
| 13 week rolling average | +3.0 % | improving |
| 52 week rolling average | -5.5 % | improving |
A summary for this week from the AAR:
For this week, total U.S. weekly rail traffic was 520,736 carloads and intermodal units, up 12.5 percent compared with the same week last year.
Total carloads for the week ending March 13 were 230,684 carloads, up 2.1 percent compared with the same week in 2020, while U.S. weekly intermodal volume was 290,052 containers and trailers, up 22.4 percent compared to 2020.
Six of the 10 carload commodity groups posted an increase compared with the same week in 2020. They included coal, up 8,744 carloads, to 64,102; grain, up 3,958 carloads, to 23,939; and farm products excluding grain, and food, up 910 carloads, to 16,766. Commodity groups that posted decreases compared with the same week in 2020 included motor vehicles and parts, down 4,258 carloads, to 14,829; chemicals, down 3,034 carloads, to 29,971; and petroleum and petroleum products, down 1,900 carloads, to 11,379.
For the first 10 weeks of 2021, U.S. railroads reported cumulative volume of 2,218,117 carloads, down 4.9 percent from the same point last year; and 2,761,908 intermodal units, up 9.9 percent from last year. Total combined U.S. traffic for the first 10 weeks of 2021 was 4,980,025 carloads and intermodal units, an increase of 2.7 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 | +2.1 % | +22.4 % | +12.5 % |
| — Ignoring coal, grain & petroleum | -6.0 % | ||
| Year Cumulative to Date | -4.9 % | +9.9 % | +2.7 % |
[click on the graph below to enlarge]
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