Railroad shipping: Weekly volumes down for the week ending June 14

Midwest flooding hampers domestic rail movements

Staff -- Logistics Management, 6/20/2008

WASHINGTON—The American Association of Railroads (AAR) said this week that carload freight volumes and intermodal traffic were down on United States railroads for the week ending June 14 compared to last year.

The AAR noted that these low volumes can be partially attributed to the flooding in the Midwestern region of the U.S. A research report from Morgan Stanley indicated that the flooding—in conjunction with the ongoing increase in fuel prices and poor economic conditions—will add to the near-term troubles facing the freight railroad industry.

The report noted that the flooding has slowed rail traffic across Iowa and key interchange points from Chicago to Memphis, with Union Pacific being hit the hardest, followed by Burlington Northern Santa Fe and Canadian National Railway.  Morgan Stanley also stated that “constraints on traffic should only last a few weeks, but any significant damage to infrastructure is still unknown at this point…[and] flooding has likely damaged the corn and soybean crop, which could lead to decreased production and exports for the rails.”

Weekly carload freight, which does not include intermodal data, came in at 324,337 cars, down 4.4 percent from the same timeframe last year. And carload freight loadings were down 4.4 percent in the West and 4.5 percent in the East.

Intermodal loadings, which are not included in carload data, totaled 228,424 trailers or containers, decreasing 4.8 percent compared to the same timeframe a year ago. Trailer volume was down 1.3 percent, and container volume was off by 5.8 percent. Prior to this week, intermodal trailer volumes were up year over year for five consecutive weeks.

Weekly railroad volume was estimated at 33.3 billion ton-miles by the AAR, which is down 3.5 percent compared to the 24^th week of 2007. .

Of the 19 commodity groups tracked by the AAR, seven were up year over year, with metallic ores up 14.6 percent and grain up 6.2 percent. Lumber and wood products down 17.1 percent, and motor vehicles were down 17.6 percent.

Cumulative volume for the first 24 weeks of the year totaled 7,804,897 carloads, which was ahead of the first 24 weeks of 2007 by 0.6 percent. Trailers or containers—at 5,302,794—were down 3.1 percent, and total volume was an estimated 807.0 billion ton-miles, which was up 1.8 percent year over year.