Pace of Rail Traffic Expansion Continues to Slow

The pace of rail traffic expansion continued to slow this week as total intermodal traffic slowed to just 1.4% year over year.  That was up marginally from last week, but down substantially from recent readings.  This week’s data brings the 12 week moving average down to 5.75%, still solidly positive, but well down from the March high of 6.75%.  Given the weakness in recent weeks and strong year over year data to start the year we should expect this data to look a bit weaker going forward as comps become more difficult.

The AAR has more details on this week’s data:

“The Association of American Railroads (AAR) reported an increase in traffic for the week ending March 23, 2013, with total U.S. weekly carloads of 278,738 carloads, up 0.2 percent compared with the same week last year. Intermodal volume for the week totaled 235,641 units, up 1.4 percent compared with the same week last year. Total U.S. traffic for the week was 514,379 carloads and intermodal units, up 0.7 percent compared with the same week last year.

Four of the 10 carload commodity groups posted increases compared with the same week in 2012, led by petroleum products, up 57 percent. Commodities showing a decrease were led by grain, down 17.3 percent.

For the first 12 weeks of 2013, U.S. railroads reported cumulative volume of 3,289,507 carloads, down 3 percent from the same point last year, and 2,851,329 intermodal units, up 6.2 percent from last year. Total U.S. traffic for the first 12 weeks of 2013 was 6,140,836 carloads and intermodal units, up 1 percent from last year.”

Chart via Orcam Investment Research:

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Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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Comments

  1. Big article in the WSJ yesterday about increase in investments by the big rail companies.

    Of course I already threw away yesterday’s paper, so I can’t go back and reference it… but it sure made it sound like the industry is booming. Specifically in transporting oil products (which as you say above, up 57%!).

    Big increase in investments sure makes you believe that the railroad industry is bullish about its future.

  2. Economist James Hamilton noted in a recent study that 10 out of 11 post-World War II recessions [see PDF] in the United States were preceded by a sharp increase in the price of crude petroleum. Oil price is already quite high and is increasing, but this time probably we don’t need a sharp increase because of the extreme fragility of the world economy.

    http://dss.ucsd.edu/~jhamilto/oil_history.pdf

  3. Some empirical observation. Recently, I saw a few freight trains in PA/NJ area. Out of intermodals they carried, approximately 25% were just truck trailers mounted on freight cars. I really wonder how they are counted between AAR and ATA….

  4. Cullen has been posting this data for years and it’s been very prescient. And every week I see someone new coming here to discuss how it’s “misleading” or something. How long does an indicator have to be right before everyone just shuts up about it and realizes that it might be useful?