Sunday, November 05, 2017

AAR: Rail Carloads decreased Slightly, Intermodal at Record Levels, in October

by Bill McBride on 11/05/2017 08:19:00 AM

From the Association of American Railroads (AAR) Rail Time Indicators. Graphs and excerpts reprinted with permission.

If you care about total U.S. rail carloads, October 2017 was not a particularly good month — total carloads were down 0.1%, or 1,220 carloads, from October 2016. Average weekly total carloads in October 2017 (266,444) were the lowest for October since sometime before 1988 when our records begin. Three main reasons for October’s decline? Coal (down 4.9%, or 17,764 carloads); grain (down 11.8%, or 12,528 carloads); and petroleum products (down 4.9%, or 1,989 carloads). But if you care about rail carloads as a gauge for the health of the U.S. economy, October 2017 was actually pretty good. That’s because carloads of coal, grain, and petroleum products tend to rise and fall for reasons that have little to do with the state of the economy. If you exclude them, U.S. rail carloads in October 2017 were up 5.6%, or 31,061 carloads, over October 2016. That’s the biggest such increase since January 2015 and supports the view that the economy has picked up steam lately. The fact that October 2017 was the best month in history for intermodal (in terms of average weekly container and trailer volume) is another good sign.
Rail Traffic Click on graph for larger image.

This graph from the Rail Time Indicators report shows U.S. average weekly rail carloads (NSA).  Dark blue is 2017.

Rail carloads have been weak over the last decade due to the decline in coal shipments.
U.S. railroads originated 1,065,777 carloads in October 2017, down 0.1%, or 1,220 carloads, from October 2016. Total carloads averaged 266,444 per week in October 2017, the lowest weekly average for October since sometime prior to 1988, when our data begin. October saw the fourth straight year-over-year monthly decline for total carloads.
Rail TrafficThe second graph is for intermodal traffic (using intermodal or shipping containers):
U.S. railroads originated 1.14 million containers and trailers in October 2017, up 6.4%, or 68,328 units, over October 2016. Average weekly volume in October 2017 of 286,039 intermodal units was the most in history, ahead of August 2017 (280,216) and June 2015 (279,285). In week 42, the third week of October, intermodal volume was 291,046 units, the highest single week in U.S. rail history.