Written by Steven Hansen
Week 12 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 recovering from the coronavirus pandemic.
Analyst Opinion of the Rail Data
We are now seeing 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 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) expanded 8.8 % 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 -7.2 % to -2.1 %
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):
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 | +12.9 % | improving |
13 week rolling average | +4.3 % | improving |
52 week rolling average | -4.6 % | improving |
A summary for this week from the AAR:
For this week, total U.S. weekly rail traffic was 521,731 carloads and intermodal units, up 16.1 percent compared with the same week last year.
Total carloads for the week ending March 27 were 232,561 carloads, up 6 percent compared with the same week in 2020, while U.S. weekly intermodal volume was 289,170 containers and trailers, up 25.8 percent compared to 2020.
Comparisons of the current week with the same week in 2020 are inflated because of the widespread economy-wide shutdowns — and subsequent large reduction in rail volumes — last year at this time.
Seven of the 10 carload commodity groups posted an increase compared with the same week in 2020. They included motor vehicles and parts, up 8,081 carloads, to 13,515; grain, up 2,320 carloads, to 24,532; and metallic ores and metals, up 1,145 carloads, to 22,020. Commodity groups that posted decreases compared with the same week in 2020 were chemicals, down 656 carloads, to 32,053; petroleum and petroleum products, down 534 carloads, to 10,694; and miscellaneous carloads, down 201 carloads, to 9,341.
For the first 12 weeks of 2021, U.S. railroads reported cumulative volume of 2,681,283 carloads, down 3.4 percent from the same point last year; and 3,333,798 intermodal units, up 11.9 percent from last year. Total combined U.S. traffic for the first 12 weeks of 2021 was 6,015,081 carloads and intermodal units, an increase of 4.5 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 | +6.0 % | +25.8 % | +16.1 % |
— Ignoring coal, grain & petroleum | +8.8 % | ||
Year Cumulative to Date | -3.4 % | +11.9 % | +4.5 % |
[click on the graph below to enlarge]
z rail1.png
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