Rail Traffic Trends are Starting to Slow

The latest rail data from the AAR showed another weak year over year reading at just 0.2%.  This brings the 12 week moving average down to 5.25% from a recent high of 6.75% and is likely to slow substantially from here.  Looking at the recent data and current trend it would not be surprising to see ~3% readings in this data by the time May rolls around.

For now, the data is still consistent with a growing economy, but it will be interesting to see how this data pans out as the summer rolls around.  We’ve now had 4 consecutive weeks of negative average readings so hopefully this is not a developing trend.

The AAR has more details:

“The Association of American Railroads (AAR) reported an increase in traffic for the week ending April 6, 2013, with total U.S. weekly carloads of 280,748 carloads, up 3.7 percent compared with the same week last year. Intermodal volume for the week totaled 231,648 units, up 0.2 percent compared with the same week last year. Total U.S. traffic for the week was 512,396 carloads and intermodal units, up 2.1 percent compared with the same week last year.

Eight of the 10 carload commodity groups posted increases compared with the same week in 2012, including petroleum and petroleum products, up 52.9 percent, and nonmetallic minerals and products up 10.9 percent. Commodities showing a decrease were led by grain, down 14.2 percent.

For the first 14 weeks of 2013, U.S. railroads reported cumulative volume of 3,851,622 carloads, down 2.5 percent from the same point last year, and 3,316,564 intermodal units, up 5 percent from last year. Total U.S. traffic for the first 14 weeks of 2013 was 7,168,186 carloads and intermodal units, up 0.8 percent from last year.”



Got a comment or question about this post? Feel free to use the Ask Cullen section, leave a comment in the forum or send me a message on Twitter.
Cullen Roche

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. He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance and Understanding the Modern Monetary System.

More Posts - Website

Follow Me:

  • Will


    Did you ever get back to us on the updated sectoral #s as you promised at the end of the article?

  • kman

    The Dow is almost at 15,000( had to pinch myself as I wrote that), up from a crash low of 6,000 something. So I would not worry about the rails, eh, life is good.They must eventually turn up, right ??

  • Alberto

    I’m not overly confident on this index expecially because transportation by rail is increasing at the expense of truck transportation. This guy, Doug Short, is one of my favourite analysts around and this is one of his latest:


    doesn’t sound good.

  • Gary_UK


    The cry of the perms bull.

    Give it 6 months, Bennie will be printing c. $140billion a month to try to arrest the slide.

  • LRM

    My understanding on the dshort post was his conclusion was the same as Cullen, a slowing but still expansionary situation. Each time this indicator has started to roll over, a change occurred to arrest the decline.

  • http://pragcap Michael Schofield

    “Printing”, then, must be the cry of the permabear. No one is “printing” Gary….you should know by now….

  • Andrea Malagoli

    ” … a change occurred to arrest the decline”

    Yes, it is called Government spending.

  • KB

    … and it will, no doubt, continue to happen in the future.

    I brought the subject of rail/auto transportation repeatedly on this blog. Unfortunately, nobody came up with the satisfactory explanation yet. My own knowledge of the subject is not good enough. The “experts” are not commenting.

  • KB

    Yes, it is incorrect to use term printing. This is not zerohedge. The appropriate term is “easing”. Will soon be changed from “quantitatively easing” to “qualitatively easing” – Japan sets the bit.

  • Steve W

    I continue to be concerned about this fragile recovery, the weakest post-war recession recovery on record. (I might have that wrong, but certainly the weakest recovery in a very long time.) Unemployment still high, labor force participation the lowest in decades, retail sales not exactly confidence inspiring, and this slow-down in rail freight.

  • http://www.nowandfutures.com bart

    On track for at least a large recession scare by August or so.

  • Anonymous1

    Why be concerned with a recession scare or fragile recovery when the market has already broken out to new highs; doesn’t the market always lead?

  • drewf

    last recession began in Dec 07, two months after all time highs.

  • Tyler

    Cullen would be so proud of you for your mental gymnastic routine.

  • http://brown-blog-5.blogspot.com/ Tom Brown

    Actually I think you could say the appropriate term is “key-stroking” since reserves are key-stroked into existence out of thin air. This is exactly the same as private banks do when they key-stroke bank deposits into existence out of think air.

  • http://brown-blog-5.blogspot.com/ Tom Brown

    “thin air” not “think air”

  • http://brown-blog-5.blogspot.com/ Tom Brown

    Of course in both cases (Fed and private banks), the “key-stroker” gets something in return for key-stroking liabilities onto its own balance sheet: In the case of the Fed they get the asset they are buying, or the loan agreement from the borrowing bank. In the case of the bank they get the loan agreement from the borrower. An exception might be IOR (Not sure about this!) in which case the Fed gets nothing in return for crediting deposit holders.