Rail Traffic Continues to Post Gains

If rail traffic is any indication of future economic growth then things are better than the mainstream media would have us believe.  The latest data from the AAR showed another gain in intermodal traffic at 4.1%.  This brings the 10 week moving average to 5.1%.  Carloads paint a more mixed picture with a decline of 1.5%.  Intermodal, historically, has been a better leading indicator of economy growth, however.  I think it’s all consistent with a muddle through economy, but not one that’s currently contracting.  The AAR has more details:

“AAR today also reported mixed weekly rail traffic for the week ending July 28, 2012, with U.S. railroads originating 288,167 carloads, down 1.5 percent compared with the same week last year. Intermodal volume for the week totaled 250,319 trailers and containers, up 4.1 percent compared with the same week last year.

Twelve of the 20 carload commodity groups posted increases compared with the same week in 2011, with petroleum products, up 46.8 percent; farm products excluding grain up 14 percent, and motor vehicles and equipment, up 8.7 percent. The groups showing a decrease in weekly traffic included metallic ores, down 38.1 percent; iron and steel scrap, down 29.6, and grain, down 7.2 percent.

Weekly carload volume on Eastern railroads was down 3.7 percent compared with the same week last year. In the West, weekly carload volume was even compared with the same week in 2011.

For the first 30 weeks of 2012, U.S. railroads reported cumulative volume of 8,428,551 carloads, down 2.6 percent from the same point last year, and 6,995,801 trailers and containers, up 3.6 percent from last year.”


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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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  • Lance

    No offense, Cullen, but what exactly do you mean by “mainstream media” (and its opinion of course)? Do you mean the majority of media outlets is attempting to give us a macro viewpoint that is more negative than reality? By intention? Exactly what data points or opinion would you direct us to in order to substantiate that idea, if that is indeed your claim. Sorry, but although the RR data may certainly point toward a less negative scenario than other recent data points (as opposed to “better than mainstream media would have us believe”), contrasting this singular data point with “mainstream media would have us believe” seems, well, a bit of a bridge too far to me. I hope this is not becoming the Sarah Palin blog by proxy. ;)

  • BJM

    Intermodal is in a secular growth phase, consistently taking share from trucking, therefore probably not the greatest proxy for broad econ growth.

  • Dunce Cap Aficionado

    I a true neophyte here, but can’t intermodal include both? I understand, of course, for greater distances across the country its going to likely be shipped *mostly* by either truck or train. My questsion I guess is, how much does one mode preclude the other?

  • BJM

    Good question. Probably the best way to measure would be revenue ton mile growth for both intermodal and trucking, that way you capture the entire truck-to-train value chain. It just is a little deceiving if total RTM is flat to slightly up, but the rails are just capturing a greater share of the total.

  • Dunce Cap Aficionado

    Thanks, BJM.

  • Dunce Cap Aficionado


    Why is it that you track the one most recent week’s growth/contraction on a YoY basis? Is it simply because you’re doing a ‘week based’ MA on a YoY basis or is there somthing about that piece of data itself you find more telling?

  • http://www.marctomarket.com Marc Chandler

    Cullen, you can illustrate you point by showing overlaying the railroad traffic chart with GDP. Moreover, a subset of rail traffic–waste/scrap–can drive the point home. Just a thought.