Monday, June 07, 2010

Rail Traffic Softens in May

by Bill McBride on 6/07/2010 03:49:00 PM

From the Association of American Railroads: Rail Time Indicators. The AAR reports traffic in May 2010 was up 15.8% compared to May 2009 - and traffic was still 11.8% lower than in May 2008.

Rail Traffic Click on graph for larger image in new window.

This graph shows U.S. average weekly rail carloads. Traffic increased in 18 of 19 major commodity categories YoY.

From AAR:

• U.S. freight railroads originated 1,153,675 carloads in May 2010, an average of 288,419 carloads per week. That’s up 15.8% from May 2009 (which is the second highest percentage gain ever, behind April 2010 — see chart ...) but down 11.8% from May 2008.

• U.S. railroads averaged 294,758 carloads per week in April 2010 and 288,793 in March 2010. Thus, May 2010’s average was actually down slightly from those months ... One month does not a trend make, but it would obviously be worrisome if the decline continued.

• As was the case in April 2010, the big year-over-year percentage gains in May 2010 U.S. rail traffic were partly a function of easy comparisons (May 2009 was a miserable month for rail traffic) and partly a function of real traffic growth.

• For the purposes of AAR rail traffic data, May 2010 consists of the four weeks ending May 29 — i.e., it does not include Memorial Day, which was May 31 this year. However, the May 2009 and May 2008 comparison months do include Memorial Day. The net result is that May 2010 data is a bit overstated relative to the two previous years, and June 2010 will be a bit understated relative to the two previous years. It is impossible to know exactly how much rail traffic is affected.
excerpts with permission
As the graph above shows, rail traffic collapsed in November 2008, and now eleven months into the recovery, traffic has only recovered about half way. This is more evidence of a sluggish recovery ... and the decline in May is concerning, although one month does not make a trend (and May was "a bit overstated" due to the timing of Memorial Day).