Week 11 of 2017 shows same week total rail traffic (from same week one year ago) improved according to the Association of American Railroads (AAR) traffic data.

Analyst Opinion of the Rail Data

We review this data set to understand the economy. If coal and grain are removed from the analysis, rail over the last 6 months been declining around 5% - but this week again shows -3.4 % (meaning that the predicitive economic elements declined from year-over-year). The intuitive portions of the data remain soft.

The rolling averages were mixed this week.

This analysis is looking for clues in the rail data to show the direction of economic activity - and is not necessarily looking for clues of profitability of the railroads. The weekly data is fairly noisy, and the best way to view it is to look at the rolling averages (carloads and intermodal combined).

A summary of the data from the AAR:

The Association of American Railroads (AAR) today reported U.S. rail traffic for the week ending March 18, 2017.

For this week, total U.S. weekly rail traffic was 495,281 carloads and intermodal units, up 2.4 percent compared with the same week last year.

Total carloads for the week ending March 18 were 246,465 carloads, up 4.6 percent compared with the same week in 2016, while U.S. weekly intermodal volume was 248,816 containers and trailers, up 0.3 percent compared to 2016.

Four of the 10 carload commodity groups posted an increase compared with the same week in 2016. They included coal, up 18.9 percent to 77,123 carloads; grain, up 8.1 percent to 23,243 carloads; and nonmetallic minerals, up 3.3 percent to 33,255 carloads. Commodity groups that posted decreases compared with the same week in 2016 included motor vehicles and parts, down 13.8 percent to 16,621 carloads; petroleum and petroleum products, down 9.3 percent to 9,655 carloads; and miscellaneous carloads, down 5.9 percent to 9,237 carloads.

For the first 11 weeks of 2017, U.S. railroads reported cumulative volume of 2,803,485 carloads, up 4.9 percent from the same point last year; and 2,854,161 intermodal units, up 0.2 percent from last year. Total combined U.S. traffic for the first 11 weeks of 2017 was 5,657,646 carloads and intermodal units, an increase of 2.5 percent compared to last year.

Coal is over 1/3 of the total railcar count, and this week the EIA says coal production is 6.9 % higher than the production estimate in the comparable week in 2016.

The middle row in the table below removes coal and grain from the changes in the railcar counts as neither of these commodities is economically intuitive.

[click on graph below to enlarge]

z rail1.png

For the week ended March 18, 2017

• Estimated U.S. coal production totaled approximately 14.1 million short tons (mmst)
• This production estimate is 4.4% lower than last week's estimate and 6.9% higher than the production estimate in the comparable week in 2016
• East of the Mississippi River coal production totaled 5.7 mmst
• West of the Mississippi River coal production totaled 8.4 mmst
• U.S. year-to-date coal production totaled 172.8 mmst, 14.5% higher than the comparable year-to-date coal production in 2016

Coal production from EIA.gov