AAR reports annual carload and intermodal volume gains for May
Total U.S. carloads in May—at 1,401,584—were up 0.7 percent annually, marking the first time monthly carloads have been up annually in 16 months
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The Association of American Railroads (AAR) reported this week that both railroad carload and intermodal volumes were up annually in May.
Total U.S. carloads in May—at 1,401,584—were up 0.7 percent annually, marking the first time monthly carloads have been up annually in 16 months. And 11 of the 20 major commodity categories tracked by the AAR saw gains, with petroleum and petroleum products up 41.8 percent (20,837 carloads) and motor vehicles and parts up 6.2 percent (4,916 carloads). Commodities seeing the steepest declines in May were grain down 20 percent (19,895 carloads) and primary metal products down 7.2 percent (3,989 carloads).
Intermodal came in at 1,214,116 containers and trailers in May, which represented a 3 percent—or 35,790 unit—gain, and the weekly average for the month of 242,823 units was the highest weekly intermodal average for the month of May ever recorded, according to the AAR.
“The economy is still not firing on all cylinders, and rail traffic in May reflects that,” said AAR Senior Vice President of Policy and Economics John Gray in a statement. “Pockets of rail traffic growth, such as autos, nonmetallic minerals, and commodities related to crude oil extraction are being countered by continued weakness in steel-related commodities, paper, and grain, among others. Like everyone else, railroads are hopeful that the economy will soon finally shake off its malaise and start reaching its potential.”
The annual gain in carloads is notable in that it mirrors some of the improving aspects of the economy such as housing and intermodal, as well as gains in bulk commodities, too.
A noted railroad analyst told LM that even with decent signs of improvement coming in May there is still limited visibility regarding what to expect in the coming months.
“The Class I railroads tend to hide behind the fact that things can change every week depending on what the economic signals are telling us,” said Tony Hatch, principal of New York-based ABH Consulting. “They are saying that they are making some tentative goals and are being cautiously optimistic, because they are being productive and have growth opportunities and are looking forward to a time when they can grow even faster. Some are looking at this year and even a little bit of next year as a bridge year at which point the economy will hopefully be better.”
Hatch added that at that point there may be increased traction in terms of rail volume gains due to more automotive plants being built, more inventory to move from the grain fields, which will help Class Is to reap the benefits of their significant capital expenditure outlays, with potential gains coming in the 2015-2016 timeframe.
What’s more, rail carloads are showing signs of improvement at a time when coal, which represents 40 percent of total carloads, continues to decline, due in large part to the emergence of the crude oil-by-rail story, which continues to impress in the form of petroleum and petroleum products volumes and help to offset the ongoing decline in coal volumes.
For the week ending June 1, the AAR reported that U.S. railroads moved 269,276 carloads for a 1.6 percent annual gain. And intermodal—at 221,806 units—was up 3.7 percent. Through the first 22 weeks of the year, carloads—at 6,081,180—are down 1.7 percent, and intermodal—at 5,261,051 units—are up 4.1 percent.
About the AuthorJeff Berman, Group News Editor Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman
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Transportation of freight in containers was first recorded around 1780 to move coal along England’s Bridgewater Canal. However, "modern" intermodal rail service by a major U.S. railroad only dates back to 1936. Malcom McLean’s Sea-Land Service significantly advanced intermodalism, showing how freight could be loaded into a “container” and moved by two or more modes economically and conveniently. As with all new technologies, there were problems that slowed the growth, which influenced many potential customers to shy away from moving intermodal.
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