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AAR reports mixed volumes for carload and intermodal volumes in 2012

By Jeff Berman, Group News Editor
January 07, 2013

As was the case for most weeks of 2012, United States railroad and intermodal volumes were mixed when the final count for the year was tallied up by the Association of American Railroads (AAR).

2012 carload volume at 14,682,219 was down 3.1 percent compared to 2011’s 15,155,992 and was down less than 1 percent compared to 2010’s 14,820,128. Intermodal volume at 12,267,336 trailers and containers was up 3.2 percent compared to 2011’s 11,892,431 and was up 8 percent compared to 2010’s 11,283,151. The AAR said that since 1988 the only year that total U.S. rail carloads were lower than 2012 was 2009, which hit roughly 13.8 million and was impacted by the effects of the recession.

2012 intermodal volume represents the second highest on record, according to the AAR, with volume down just 0.1 percent—or 14,885 containers and trailers—from 2006’s record high.

That intermodal output is impressive, with the AAR pointing out that a new annual record almost certainly would have been set in 2012 if not for the strike by harbor clerks at the Ports of Los Angeles and Long Beach beginning in late November, and/or Hurricane Sandy, which severely disrupted rail and port operations on the East Coast beginning in late October.

The AAR reported that 12 of the 20 commodities it tracks saw annual gains in 2012. Petroleum products led the pack, up 170,994 carloads or 46.3 percent. Motor vehicles and parts were up 114,221 carloads or 16.5 percent, and crushed stone, sand and gravel rounded out the top three up 71,012 carloads or 7.9 percent.

As expected, coal was the commodity seeing the single largest annual loss, due in part to the ongoing emergence of low-priced natural gas. Coal, which represents 41 percent of total U.S. carload traffic, was down 10.8 percent or 726,257 carloads. Grain was next, down 9.5 percent or 106,289 carloads. Metallic ores fell 5.7 percent or 22,421 carloads.

“Coal and grain typically account for around half of U.S. rail carloads, so when they’re down, chances are good that overall rail carloads are down too, as we saw in 2012,” said AAR Senior Vice President John T. Gray in a statement.  “That said, a number of key rail carload categories showed solid improvement in 2012, including categories like autos and lumber that are most highly correlated with economic growth.  Meanwhile, intermodal just missed setting a new volume record in 2012.  In 2013, freight railroads look forward to continuing to provide the world’s safest, most cost effective freight rail transportation service.”

AAR officials said that the steep declines in coal and grain are a “serious concern” to railroads but from the standpoint of the health of the economy these declines are less problematic because coal and grain carloads often rise and fall for reasons that have little to do with the state of the economy. The coal declines, AAR explained, were due mainly to reduced demand from coal-fired power plants because of lower natural gas prices and more stringent environmental regulations. As for grain, AAR said that exports were down due largely to the severe summer drought which reduced production.

When coal and grain carloads are removed, the AAR noted that 2012 U.S. carloads were up 356,224 carloads or 4.9 percent annually, marking three years of annual gains.

“2012 was not a great year for railroads in that they make money on the bulk commodities that were down, but it was not a terrible year either as they produced solid annual gains,” said Tony Hatch, principal of ABH Consulting. “There was nothing the railroads could have done to change those numbers at all.”

Hatch added that putting the 2012 numbers aside assessing areas where the railroads can assimilate traffic and share and where their services can pay off shows they did a very good job overall in 2012.

What’s more, he said it is a sign of an economy that had some big pieces not working on all cylinders that were not directly related to railroad performance. 

“Folks are getting increasingly confident when talking about volumes in the sense that ‘this is what it is,’ and we are in a slow-growth environment,” said Hatch. “That said, there is more visibility into volume trends than there has been in the past. Shippers and railroads have been less reticent about what they see, whereas before it was harder to gauge in terms of things going up or down. Nobody expected things to stay the same. 2014 and 2015 could be very good years for the railroads, with things likely staying the same in 2013.”

About the Author

Jeff Berman headshot
Jeff 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. .(JavaScript must be enabled to view this email address).

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Article Topics

News · Intermodal · Rail Freight · AAR · Carload · All topics


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