Week 17 of 2018 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 for carloads, this week it expanded 4.0 %. We primarily use rolling averages the analyze the data due to weekly volatility - and the 4 week rolling average for the intuitive sectors improved to 3.4 %.

Intermodal transport growth remains strong year-over-year.

The following graph compares the four-week moving averages for carload economically intuitive sectors (red line) vs. total movements (blue line):

Although rail's growth rate is improving (and is better than GDP growth - it has yet to confirm that the economy is getting ready for a growth spurt.

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 [including coal and grain] and intermodal combined).

A summary of the data from the AAR:

U.S. railroads originated 1,051,026 carloads in April 2018, up 3.3 percent, or 34,020 carloads, from April 2017. U.S. railroads also originated 1,099,000 containers and trailers in April 2018, up 6.8 percent, or 69,630 units, from the same month last year. Combined U.S. carload and intermodal originations in April 2018 were 2,150,026, up 5.1 percent, or 103,650 carloads and intermodal units from April 2017.

In April 2018, 15 of the 20 carload commodity categories tracked by the AAR each month saw carload gains compared with April 2017. These included: crushed stone, sand & gravel, up 8,466 carloads or 8.6 percent; coal, up 7,337 carloads or 2.4 percent; and grain, up 5,305 carloads or 5.7 percent. Commodities that saw declines in April 2018 from April 2017 included: nonmetallic minerals, down 2,513 carloads or 13 percent; waste & nonferrous scrap, down 1,056 carloads or 7.1 percent; and primary forest products, down 651 carloads or 14.6 percent.

"Total U.S. rail traffic so far this year is a shade below where it was in 2015, but otherwise is higher than it's been in the last ten years" said AAR Senior Vice President of Policy and Economics John T. Gray. "Additionally, 15 of the 20 commodity categories we track had higher carloads in April 2018 than in April 2017, the most since January 2015. That's good news for railroads and good news for the economy."

Excluding coal, carloads were up 26,683 carloads, or 3.8 percent, in April 2018 from April 2017. Excluding coal and grain, carloads were up 21,378 carloads, or 3.5 percent.

Total U.S. carload traffic for the first four months of 2018 was 4,347,225 carloads, up 0.6 percent, or 24,993 carloads, from the same period last year; and 4,595,381 intermodal units, up 5.8 percent, or 250,934 containers and trailers, from last year.

Total combined U.S. traffic for the first 17 weeks of 2018 was 8,942,606 carloads and intermodal units, an increase of 3.2 percent compared to last year.

Week Ending April 28, 2018

Total U.S. weekly rail traffic was 551,498 carloads and intermodal units, up 5.9 percent compared with the same week last year.

Total carloads for the week ending April 28 were 266,453 carloads, up 3.7 percent compared with the same week in 2017, while U.S. weekly intermodal volume was 285,045 containers and trailers, up 8.1 percent compared to 2017.

Nine of the 10 carload commodity groups posted an increase compared with the same week in 2017. They included coal, up 3,183 carloads, to 78,970; nonmetallic minerals, up 1,866 carloads, to 41,113; and petroleum and petroleum products, up 1,265 carloads, to 10,893. One commodity group posted a decrease compared with the same week in 2017: metallic ores and metals, down 199 carloads, to 24,454.

Coal is over 1/3 of the total railcar count, and this week the EIA says coal production is 2.2 % higher than the production estimate in the comparable week in 2017.

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]

For the week ended April 28, 2018

• Estimated U.S. coal production totaled approximately 13.8 million short tons (mmst)
• This production estimate is 2% lower than last week's estimate and 2.2% higher than the production estimate in the comparable week in 2017
• East of the Mississippi River coal production totaled 5.6 mmst
• West of the Mississippi River coal production totaled 8.2 mmst
• U.S. year-to-date coal production totaled 246.6 mmst, 2.3% lower than the comparable year-to-date coal production in 2017