RAIL DATA IMPROVES
Rail traffic was mixed this week as the Chinese New Year skewed some of the data according to the AAR. Carloads fell 1.6% year over year and were down 15.3% versus 2008. Intermodal traffic jumped 19% , but was down 11.1% versus 2008. The year over year data was skewed by a sharp jump in container volume due to the week of the Chinese New Year. As a result container volume rose 25% year over year.
The breadth of the data was slightly improved over last week. The AAR reports:
The decline in total weekly carload volume was largely caused by a 16,828-carload drop in coal loadings. Twelve of the 19 carload freight commodity groups actually were up in comparison with the same week last year. Double-digit increases were reported in loadings of metals (44.6 percent), motor vehicles and equipment (30.5 percent), grain (21.9 percent), metallic ores (17.6 percent), grain mill products (14.4 percent) and chemicals (13.7 percent).
I have an import business. Chinese New Year started around the 8th for the holiday, but different factories close down at slightly different times, anyway point being it takes about 15-17 days from China only, to get to the west coast ports, 3 weeks about from Vietnam, Indo, Malaysia etc so containers are still arriving in this rail week report and after this week also, to say the drop is becuase of CNY does not fly, the ships are loaded and full and still arriving, there is just not so many of them any more.Container ships were totally jammed, I mean jammed, we have had a doubling of price in 4-6 weeks for conatiners.
On top of that when they are loading they are auctioning of the space to the highest bidder, we were getting e-mails saying pay $300 more and you are on the vessel we had no chocie we had to pay.
The container fleet as been cut big time and they don’t want to bring the idle ships back just yet, to risky. I believe after CNY rates may be under pressure to come down again and that will be a first in such a short space of time if it happens.
The other increases we have had is from China products, not small either 10% ish, so we have a lot of import inflation heading this way and we can’t increase prices becuase the rises were to fast.
If you have the data, you should start showing it on an absolute basis, not just YoY growth. The +20% number looks impressive on the graph and is clearly meaningful, but given how long the growth numbers were negative, I have little intuitive sense of where January’s shipments are relative to their peak or as a 2-year growth number.