AAR reports mixed volumes for July 2012
July carloads—at 1,103,733—were down 7,787 carloads or 0.7 percent annually, and intermodal—at 946,071 trailers and containers—was up 50,431 units or 5.6 percent compared to July 2011.
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Continuing a common theme, carload and intermodal volumes were again mixed in July, according to the Association of American Railroads (AAR).
July carloads—at 1,103,733—were down 7,787 carloads or 0.7 percent annually, with a weekly carload average of 285,068.
Of the 20 commodity categories tracked by the AAR, eight were up annually in July. Petroleum and petroleum products were up 13,368 carloads or 47.2 percent, and motor vehicles and parts were up 9,317 carloads or 23.3 percent.
“Carloads of some of the more economically sensitive commodities, such as lumber and wood, steel, and autos, gave us a mixed message in July,” said AAR Senior Vice President John T. Gray in a statement. “While lumber related to home construction remained very positive, other manufactured goods either grew more slowly than they have been or actually fell in July. It remains to be seen if this is just a blip or something more serious.”
Intermodal—at 946,071 trailers and containers—was up 50,431 units or 5.6 percent compared to July 2011. The weekly intermodal average for the month—at 236,518—is the highest ever recorded for July, said the AAR.
AAR officials said recently that year-to-date 2012 U.S. intermodal originations were slightly ahead of 2006, “setting up the very real possibility that 2012 will be the highest-volume intermodal year ever for U.S. railroads.” They added that the recovery since 2009 for intermodal volumes has been remarkable. In the first six months of 2009, the AAR noted that average weekly intermodal loadings were 185,075 containers and trailers. And in the first six months of 2012, the average was up to 232,682 containers and trailers, a 25.7 percent increase.
Even with mixed volumes remaining prevalent, rail analysts have told LM that a steady and slow growth pattern remains intact in 2012, which has aided the rails for future planning in the form of record-high 2012 capital expenditure plans by Class I railroads, which are at about $13 billion.
What’s more, anecdotal reports indicate that shippers are generally satisfied with current service levels, although there is some concern about future capacity, with current capacity levels solid.
“Railroading continues to flourish as the recession torques back into recovery and this will likely continue for quite some time,” said Brooks Bentz, a partner in Accenture’s Supply Chain practice. “Domestic intermodal is doing well, international is sluggish, although an increase in the range of 4.0%-4.5% is predicted. Carload is doing OK, basically tracking close to GDP, with the major exception of coal, which is seeing year-over-year declines. Industry leaders fairly uniformly see it as a one-way slide, with recovery of any magnitude not likely soon, if eve. This, though, has not materially dampened the overall rail recovery.”
The AAR reported that Class I employment increased by 611 employees in June (the most recent month for which data is available) from May and up 3,819 compared to June 2011. And it added that total Class I employment at 163,159 is at its highest level since October 2008.
For the week ending July 28, the AAR reported that U.S. carloads—at 288,167—were down 1.5 percent annually. And intermodal—at 250,319—was up 4.1 percent annually. And for the first 30 weeks of 2012, the AAR said that U.S. railroad carloads were down 2.6 percent at 8,428,551, while intermodal was up 3.6 percent at 6,995,801 trailers and containers.
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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