Monday, April 08, 2019

AAR: March Rail Carloads down 8.9% YoY, Intermodal Down 1.5% YoY

by Calculated Risk on 4/08/2019 11:54:00 AM

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

We used this phrase a few years ago in Rail Time Indicators, but it’s appropriate again now: sometimes you’re the windshield and sometimes you’re the bug. In March, railroads were the bug. Total U.S. rail carloads in March 2019 were down 8.9% (93,616 carloads) from March 2018. That’s the biggest percentage decline for total carloads for any month since May 2016. … U.S. intermodal originations were down 1.5% (16,387 containers and trailers) in March 2019 from March 2018. Combined with a 0.9% decline in February, this marks the first two-month decline for intermodal since October 2016.

A slowing economy may be having an impact on rail traffic, but bad weather is a more likely culprit. March had bad weather events in many places, but the worst was the horrendous flooding in Nebraska and Iowa caused by melting snow and heavy rain.
emphasis added
Rail Traffic Click on graph for larger image.

This graph from the Rail Time Indicators report shows U.S. average weekly rail carloads (NSA).  Red is 2019.

Rail carloads have been weak over the last decade due to the decline in coal shipments.
In March, just 4 of the 20 carload commodity categories the AAR tracks saw carload gains — the fewest since July 2016. The 8.9% decline in March was the biggest percentage decline for total carloads for any month since May 2016, and follows a 2.7% decline in February. Weekly average total carloads in March 2019 were 239,286, the fourth lowest of any month since sometime prior to 1988, when our data begin.

For the first quarter of 2019, total carloads were down 3.1%, or 100,800 carloads, from the first quarter of 2018. That’s the biggest quarterly decline since the third quarter of 2016.
Rail TrafficThe second graph is for intermodal traffic (using intermodal or shipping containers):
U.S. intermodal originations were down 1.5% (16,387 containers and trailers) in March 2019 from March 2018. Combined with a 0.9% decline in February, this marks the first two-month decline since October 2016. Weekly average intermodal volume in March 2019 was 266,448 units, the second best for March in history (behind March 2018). For the first quarter, intermodal was down 0.6%.
Traffic will likely pick up in April, and there might be some bounce back from the poor weather and flooding.