Week 39 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

Rail continues to have relatively good growth.

We review this data set to understand the economy. If coal and grain are removed from the analysis for carloads, this week it expanded 1.0 %. We primarily use rolling averages the analyze the data due to weekly volatility - and the 4 week rolling average for the intuitive sectors declined from 8.4 % to 4.4 %.

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):

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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 1,066,826 carloads in September 2018, up 2.6 percent, or 26,826 carloads, from September 2017. U.S. railroads also originated 1,127,385 containers and trailers in September 2018, up 6.2 percent, or 65,801 units, from the same month last year. Combined U.S. carload and intermodal originations in September 2018 were 2,194,211, up 4.4 percent, or 92,627 carloads and intermodal units from September 2017.

In September 2018, 14 of the 20 carload commodity categories tracked by the AAR each month saw carload gains compared with September 2017. These included: petroleum & petroleum products, up 14,750 carloads or 41.5 percent; chemicals, up 5,145 carloads or 4.2 percent; and grain, up 5,001 carloads or 6.1 percent. Commodities that saw declines in September 2018 from September 2017 included: coal, down 5,562 carloads or 1.6 percent; crushed stone, sand & gravel, down 3,042 carloads or 3 percent; and motor vehicles & parts, down 877 carloads or 1.3 percent.

"Weakness in a few commodity categories notwithstanding, rail traffic in September was consistent with the economy we have today in which fundamentals like industrial output and consumer spending are solid," said AAR Senior Vice President of Policy and Economics John T. Gray. "Intermodal, the business line most closely related to consumer spending, was especially strong — the last two weeks of September were the top two weeks in history for U.S. intermodal. Tracking the economy and rail traffic require diligence to help identify turning points, but for now there is no indication that good economic times will end in the immediate future."

Excluding coal, carloads were up 32,388 carloads, or 4.7 percent, in September 2018 from September 2017. Excluding coal and grain, carloads were up 27,387 carloads, or 4.5 percent.

Total U.S. carload traffic for the first nine months of 2018 was 10,248,559 carloads, up 2 percent, or 199,538 carloads, from the same period last year; and 10,832,004 intermodal units, up 6 percent, or 613,414 containers and trailers, from last year.

Total combined U.S. traffic for the first 39 weeks of 2018 was 21,080,563 carloads and intermodal units, an increase of 4 percent compared to last year.

Week Ending September 29, 2018

Total U.S. weekly rail traffic was 571,922 carloads and intermodal units, up 3.7 percent compared with the same week last year.

Total carloads for the week ending September 29 were 272,306 carloads, up 0.5 percent compared with the same week in 2017, while U.S. weekly intermodal volume was 299,616 containers and trailers, up 6.8 percent compared to 2017.

Six of the 10 carload commodity groups posted an increase compared with the same week in 2017. They included petroleum and petroleum products, up 2,839 carloads, to 12,140; metallic ores and metals, up 1,854 carloads, to 25,794; and chemicals, up 1,406 carloads, to 33,047. Commodity groups that posted decreases compared with the same week in 2017 included nonmetallic minerals, down 3,915 carloads, to 35,391; grain, down 1,759 carloads, to 21,870; and motor vehicles and parts, down 812 carloads, to 16,656.

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 September 29, 2018

• Estimated U.S. coal production totaled approximately 15.2 million short tons (mmst)
• This production estimate is 1.6% higher than last week's estimate and 3.7% higher than the production estimate in the comparable week in 2017
• East of the Mississippi River coal production totaled 6 mmst
• West of the Mississippi River coal production totaled 9.2 mmst
• U.S. year-to-date coal production totaled 562.4 mmst, 2.8% lower than the comparable year-to-date coal production in 2017