Railroad shipping: AAR reports volumes for week ending October 17 are down
Year-over-year volumes remain down, but comparisons will get easier as weeks now match up with beginning of steep volume declines at this time in 2008
Jeff Berman, Group News Editor -- Logistics Management, 10/23/2009
WASHINGTON-The Association of American Railroads (AAR) reported this week that total volume for the week ending October 17 was down 15.4 percent compared to the corresponding week last year.
Carload freight for the week, which does not include intermodal data, came in at 275,545 carloads, which was slightly ahead of the week ending October 10, which hit 273,429 carloads. Carloads were down 14.2 percent in the West and 17 percent in the East.
Coming off a week in which intermodal volumes reached their highest level for all of 2009 at 208,941 trailers or containers, volumes for the week ending October 10 came in at 206,139 trailers or containers, representing a 12.6 percent year-over-year decline. Intermodal container and trailer volumes were down 6.7 percent and 35.2 percent, respectively, year-over-year. Although intermodal volumes were down, there has been steady overall improvement in recent weeks, compared to pre-Labor Day weekly volumes, which were in the 189,000-200,000 range.
While volumes remain down year-over-year, AAR officials said that the week ending October 10 corresponds with the same week a year ago when "notable declines in rail carloads and rail interposal showed the first significant signs of the nation's downturn," adding that "year-over-year comparisons for weekly rail traffic may appear to improve going forward."
The AAR, railroad executives and industry analysts have said that rail volumes continue to reflect the overall economy, but have also pointed out that volumes appear to be stabilizing and not getting incrementally worse. And with the fourth quarter here, analysts say that year-over-year volumes will look better in comparison to the sharp decline at this time a year ago, when the recession was not yet fully in effect.
"We expect year-over-year volumes to continue to appear less worse throughout the year, as comps continue to ease going forward," said Ed Wolfe, president of Wolfe Research, in a research note. "However, demand remains weak."
Lower demand was also reflected in third quarter earnings reports for Class I rail carriers Union Pacific, Burlington Northern Santa Fe and CSX, which saw volume declines of -15.1 percent, -17.5 percent and -15 percent, respectively.
Weekly rail volume, which is considered as a "truer" indicator of rail performance, was estimated at 31.0 billion ton-miles, a 13.9 percent year-over-year decline. This marks the fifth consecutive week ton-miles are up year-over-year.
Of the 19 commodities tracked by the AAR, 18 were down year-over-year, with grain mill products up 7.3 On the negative side were coal at -12.6 percent, lumber & wood products at -31.5 percent, and motor vehicles & equipment at -20.6 percent, among others.
Through the first 41 weeks of 2009, the AAR said that U.S. railroads reported cumulative volume of 10,930,879 carloads, an 18.1 percent annual decline. Trailers and containers-at 7,762,379-were down 16.5 percent, and total volume at an estimated 1.17 trillion ton-miles was off by 13.9 percent.
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