INTERMODAL RAIL TRAFFIC APPROACHES PRE-RECESSION LEVELS
Another strong set of numbers this week from the rail sector (via the AAR):
“The Association of American Railroads today reported that rail traffic continues to reflect the sluggish economy with U.S. railroads originating 282,199 carloads for the week ending July 17, 2010, up 5.5 percent compared with the same week in 2009, but down 13.8 percent from pre-recession levels in 2008. In order to offer a complete picture of the progress in rail traffic, AAR reports 2010 weekly rail traffic with comparison weeks in both 2009 and 2008.Intermodal traffic totaled 227,661 trailers and containers, up 20.1 percent from the same week a year ago and down only 2.5 percent compared with 2008. Compared with the same week in 2009, container volume increased 22.1 percent and trailer volume rose 10 percent. Compared with the same week in 2008, container volume increased 5.6 percent and trailer volume dropped 32.5 percent.”
“Eleven of the 19 carload commodity groups increased from the comparable week in 2009, with metallic ores, up 208.4 percent, posting the most significant gain. Three commodity groups posted an increase over 2008 levels including farm products, up 13.4 percent, and metallic ores, up 3.5 percent.
Carload volume on Eastern railroads was up 3.8 percent from last year, but down 15.7 percent from 2008. In the West, carload volume was up 6.7 percent from last year but down 12.4 percent from two years ago.
For the first 28 weeks of 2010, U.S. railroads reported cumulative volume of 7,874,125 carloads, up 7.3 percent from 2009, but down 13.2 percent from 2008, and 5,855,507 trailers or containers, up 13.1 percent from 2009, but down 6.4 percent from 2008.”
Source: AAR
Does this still reflect the inventory replenishment cycle? Also are the carloads heading for the back to school season? I am curious as to the divergence between end products result (retail sales numbers) and the producers index (uptick in manufacturing and car sales). Are the producers misreading the demand or is there something else going on behind the scene that will absorb the extra goods, ie more government programs to pull forward demand?
Guess those railroad CEOs weren’t lying after all, eh??
As I stated after the last AAR report, from an on the ground worker, trains are less and shorter. We should be uptick shipping Xmas freight but it just ain’t happening. This is exactly what happened before the economy tanked last time.
One thing that is certainly up-biasing the numbers is the fact that the Port of Montreal is closed (union strike). Ships are backed up all the way to Quebec. Ships entering the Saint Lawrence seaway are being re-directed to New York & Norfolk.
So stuff headed for Michigan & Illinois is getting there by CSX rail.
Bet 2cents!
I may be mistaken, but July 2008 was not “pre recession”. July 2007 would be pre-recession.
You are not mistaken. Pre-recession would have to be prior to Dec 2007. Also check out the Weekly Railfax Rail Carloading Report, which has a variety of information including 4 and 13 week rolling average charts:
http://railfax.transmatch.com/
Interesting. I was wondering if there was an export component to rising intermodal figures, but do you think it’s entirely explained by re-routing of St. Lawrence traffic?
Anyone else notice that the rest of the shipping categories appear to be relatively flat. Also, what’s going on with Kansas City Southern volumes? Mexico and/or the Midwest in a world of hurt?
And anyone else concerned by sje’s comment? http://pragcap.com/intermodal-rail-traffic-approaches-pre-recession-levels/comment-page-1#comment-22410
And anyone else concerned by sje’s comment?
No, it’s both anecdotal and unverified.
The carloads data is both macro and from a reliable source. I would tend to rely upon it; however, I would also put into context by using other freight numbers, such as shipping and trucking, in order to get a better sense of the big picture.