Rail Traffic Continues to Show Expansion

Rail traffic is just one of many real-time indicators providing us with a clear picture of the NON-RECESSIONARY United States economy.  This week’s data showed a solid 4% increase in intermodal traffic.  That brings our 12 week moving average to 6.4%.   Not bad.

The AAR has more details:

“AAR reported mixed rail traffic for the week ending March 9, 2013, with total U.S. weekly carloads of 276,698 carloads, down 0.9 percent compared with the same week last year. Intermodal volume for the week totaled 235,174 units, up 4 percent compared with the same week last year. Total U.S. traffic for the week was 511,872 carloads and intermodal units, up 1.3 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 46.5 percent. Commodities showing a decrease were led by grain, down 16.5 percent.

For the first ten weeks of 2013, U.S. railroads reported cumulative volume of 2,730,145 carloads, down 3.7 percent from the same point last year, and 2,386,882 intermodal units, up 7.2 percent from last year. Total U.S. traffic for the first ten weeks of 2013 was 5,117,027 carloads and intermodal units, up 1.1 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. Cullen –

    The intermodal numbers are a bit skewed. What we are seeing is more oil is being shipped via rail since gas is so high. It’s much cheaper to put a bunch of trucks on a train and ship them across the country than to drive them there at the moment. It makes better sense to view what each of the intermodal components is doing rather than the whole.

  2. Even if you back out petroleum the monthly data is still positive. It’s not the only driver of the growth.

  3. Intermodal means using rail and trucks to deliver the freight. With high gas prices, I hypothesize that freight that at one time might have moved solely by truck is now being moved by truck and rail to its final destination. Hence, my reasoning, possibly wrong, not to give this category as much weight currently.

    The hypothesis is rooted in the fact that Rail traffic has shown a contraction for most of 2013 and only recently made it up to unchanged. Even the growing “sectors” of rail traffic have witnessed a sharp drop compared to a year ago.

    Bottom line is growth is not as strong as a pure intermodal reading might lead one to believe.

  4. Petroleum is 5% of the all intermodal traffic. Intermodal is mostly coal and other products. The petroleum shipments are minimal.

  5. “The intermodal numbers are a bit skewed. What we are seeing is more oil is being shipped via rail since gas is so high.”

    WRONG! Intermodal is only about shipping freight containers. Oil is not transported in freight containers. The oil that is being shipped is counted in the commodity side of the AAR’s numbers, not the intermodal.

  6. Couple of things…. read the rest of the statement. I agree that I wrote that wrong….. but to write WRONG! and then be a kunda is not helpful for discussion sake.

    The rest of the point stands:” It’s much cheaper to put a bunch of trucks on a train and ship them across the country than to drive them there at the moment”

    The real test would be to view the increase in intermodal versus the numbers for trucking. IF trucking is losing to rail….. the question is, do we have real “growth”?

  7. The Cass freight shipment index is negative YoY for the last 3 months. The expenditure index is positive during the same period at a bit below the actual CPI-U inflation rate.

    Total (carloads plus intermodal) AAR rail traffic is also negative YoY for the last 3 months. Same with the waste+other rail sector, which tends to lead GDP.

    The Baltic Dry Index is also negative YoY (-5%) for the last 3 months.