Perhaps weather was a reliable excuse for last week’s weakness in rails.  This week’s data showed a dramatic improvement in overall data.  Carloads were up 6.2% on a year on year basis while intermodal traffic surged 18.5%. This is consistent with the continuing strong demand for commodities and the robust manufacturing data we have seen in the USA in recent months.  The data has been volatile in recent months, however, the 6 week moving average is still consistent with high single digit growth.  The AAR elaborates:

“The Association of American Railroads (AAR) today reported gains in weekly rail traffic for the week ending Feb. 12, 2011, with U.S. railroads originating 274,043 carloads, up 6.2 percent compared with the same week last year. Intermodal volume for the week was also up, totaling 228,035 trailers and containers, up 18.5 percent compared with the same week in 2010.Sixteen of the 20 carload commodity groups posted increases from the comparable week in 2010. Those groups posting significant increases in loadings included: metallic ores, up 105.1 percent; farm products excluding grain, up 27.4 percent; motor vehicles and equipment, up 24.6 percent, and nonmetallic minerals, up 24.4 percent. Those commodity groups reporting a drop in weekly traffic saw only single digit declines: grain mill products, down 7 percent; food and kindred products, down 2.5 percent, and grain, down 1.5 percent.

Weekly carload volume on Eastern railroads was up 21.8 percent compared with last year. In the West, weekly carload volume was down 2.5 percent compared with the same week in 2010.

For the first six weeks of 2011, U.S. railroads reported cumulative volume of 1,684,457 carloads, up 6.4 percent from last year, and 1,290,347 trailers and containers, up 7.8 percent from the same point in 2010.”

Source: AAR


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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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  • pflynnharv


    It would provide prospective if you could show the chart over a longer period, specifically one that incorporates a complete business cycle. A longer reference point provides a better framework to understand the possible growth trend in GDP for 2011 and 2012.

    Why not look at the AAR data over several periods. First, I would go back to at least 2005, when housing started to peak and look at the growth trend from that point forward. Second, use longer periods, five, ten, and twenty-year cycles to provide some historical perspective.


  • Skateman

    Rail seems so much stronger than the overall economy. Is part of it that they’re just taking share from truckers?