Week 24 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 3.2 %. We primarily use rolling averages the analyze the data due to weekly volatility - and the 4 week rolling average for the intuitive sectors was again unchanged at 3.6 %.

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:

For this week, total U.S. weekly rail traffic was 558,098 carloads and intermodal units, up 4.1 percent compared with the same week last year.

Total carloads for the week ending June 16 were 269,748 carloads, up 1.9 percent compared with the same week in 2017, while U.S. weekly intermodal volume was 288,350 containers and trailers, up 6.3 percent compared to 2017.

Seven of the 10 carload commodity groups posted an increase compared with the same week in 2017. They included petroleum and petroleum products, up 1,924 carloads, to 11,256; nonmetallic minerals, up 1,827 carloads, to 39,994; and grain, up 1,407 carloads, to 23,086. Commodity groups that posted decreases compared with the same week in 2017 were coal, down 1,420 carloads, to 85,538; miscellaneous carloads, down 1,287 carloads, to 9,443; and motor vehicles and parts, down 300 carloads, to 16,891.

For the first 24 weeks of 2018, U.S. railroads reported cumulative volume of 6,208,034 carloads, up 1.3 percent from the same point last year; and 6,571,354 intermodal units, up 6 percent from last year. Total combined U.S. traffic for the first 24 weeks of 2018 was 12,779,388 carloads and intermodal units, an increase of 3.6 percent compared to last year.

Coal is over 1/3 of the total railcar count, and this week the EIA says coal production is 3.8 % lower 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]

z rail1.png

For the week ended June 16, 2018

• Estimated U.S. coal production totaled approximately 15 million short tons (mmst)
• This production estimate is 0.4% higher than last week's estimate and 3.8% lower than the production estimate in the comparable week in 2017
• East of the Mississippi River coal production totaled 6.1 mmst
• West of the Mississippi River coal production totaled 8.8 mmst
• U.S. year-to-date coal production totaled 346.3 mmst, 1.9% lower than the comparable year-to-date coal production in 2017