Week 51 of 2016 shows same week total rail traffic (from same week one year ago) improved a lot according to the Association of American Railroads (AAR) traffic data.

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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 improved 18.5%.

So this week's data is an outlier caused by week 51 last year ending in the week between Christmas and New Years (a low volume period) - and this year week 51's cutoff was before Christmas. It is too risky to try to logically analyze the data this week.

The contraction in rail counts began over one year ago, and now rail movements are being compared against weaker 2015 data - and this is the cause periodic acceleration in the short term rolling averages. Still, rail is weak to very week compared to previous years.

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 December 24, 2016.

For this week, total U.S. weekly rail traffic was 496,633 carloads and intermodal units, up 27 percent compared with the same week last year.

Total carloads for the week ending December 24 were 243,917 carloads, up 17.9 percent compared with the same week in 2015, while U.S. weekly intermodal volume was 252,716 containers and trailers, up 37.2 percent compared to 2015.

Please note: Christmas Day is not included in the current week this year, but is included in the comparable week in 2015. Therefore, this week's traffic volume is somewhat overstated compared to 2015.

Nine of the 10 carload commodity groups posted an increase compared with the same week in 2015. They included miscellaneous carloads, up 30.6 percent to 8,186 carloads; motor vehicles and parts, up 24.6 percent to 16,491 carloads; and grain, up 24 percent to 22,582 carloads. One commodity group posted a decrease compared with the same week in 2015: petroleum and petroleum products, down 5.4 percent to 9,972 carloads.

For the first 51 weeks of 2016, U.S. railroads reported cumulative volume of 12,880,893 carloads, down 8.4 percent from the same point last year; and 13,280,460 intermodal units, down 1.8 percent from last year. Total combined U.S. traffic for the first 51 weeks of 2016 was 26,161,353 carloads and intermodal units, a decrease of 5.1 percent compared to last year.

Coal is over 1/3 of the total railcar count, and this week the EIA says coal production is 27.7 % higher than the production estimate in the comparable week in 2015.

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]

Current Rail Chart:

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z rail1.png

For the week ended December 24, 2016

• Estimated U.S. coal production totaled approximately 15.2 million short tons (mmst)
• This production estimate is 3.1% lower than last week's estimate and 27.7% higher than the production estimate in the comparable week in 2015
• East of the Mississippi River coal production totaled 5.8 mmst
• West of the Mississippi River coal production totaled 9.4 mmst
• U.S. year-to-date coal production totaled 726.3 mmst, 18% lower than the comparable year-to-date coal production in 2015

Coal production from EIA.gov