AAR reports mixed volumes for October 2012
October carloads—at 1,422,654—were down 6.1 percent, and intermodal—at 1,233,475 trailers and containers—was up 1.5 percent.
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Mixed volumes have been the primary theme for railroad traffic in 2011, and October was no exception, according to data from the Association of American Railroads (AAR).
October carloads—at 1,422,654—were down 6.1 percent—or 92,601 carloads— annually. AAR said this is the largest year-over-year carload percentage decline since November 2009. And for the year to date through October, AAR said U.S. rail carloads are down 3.0 percent—or 380,739 carloads—compared to the same period in 2011.
The AAR said that coal represented the total carload decline in October, down 16.0 percent—or 108,210 carloads—in October 2012 from October 2011, averaging 113,600 carloads per week in October which, was the lowest weekly average in five months.
For carload commodities, the AAR reported that nine of the 20 commodities it tracks were up in October, including petroleum and petroleum products up 54.5 percent and crushed stone sand and gravel up 11.9 percent. Grain was down 8.1 percent and iron steel scrap was down 8.1 percent.
Tony Hatch, principal at New York-based ABH Consulting, said that bulk commodities are down for a variety of reasons, with last year’s mild winter impacting how coal is being used and increased natural gas usage, with stockpiles from last winter still being worked off, adding that grain volumes continue to be impacted by the Midwestern drought this year.
“These declines are not happening because of the economy,” he said. “Most of the cyclical stuff is growing in low single digits, which belies headline news suggesting the economy has slowed down, whereas annual rail volume gains are down is because bulk traffic is down double-digits in most cases. Minus declines in coal and grain rail carload volumes seem to reflect an economy still growing but not in a super-strong way, but stronger than the business headlines would have you believe. It is not growing like it was from 205-2007 but it is not as bad as 2009-2010 either.”
And intermodal—at 1,233,475 trailers and containers—was up 1.5 percent compared to October 2011. October’s intermodal growth represents the 35th straight month intermodal has been up annually, according to AAR data. But the AAR noted that October’s annual gain was its smallest percentage gain in 14 months, and it said that the average weekly volume in October—at 246,695 units—is the second highest year-to-date, trailing only June.
On a year-to-date basis, intermodal volume is up 3.5 percent—or 348,709 containers and trailers—compared to the same period in 2011 and 0.1 percent off 2006’s record pace.
“The fundamentals of U.S. rail traffic remained roughly the same in October as in recent months: weakness in coal, remarkable growth in petroleum and petroleum products, a slight slowing of growth in intermodal and autos, and mixed results for everything else,” said AAR Senior Vice President John T. Gray in a statement.
For the week ending November 3, which was impacted by Hurricane Sandy, the AAR said that U.S. rails moved 278,320 carloads for a 6.8 percent annual decline. This is below the previous two weeks, which hit 287,104 and 288,791, respectively. Carload volume on Eastern rails were down 12.7 percent, and volumes were down 3 percent out West.
Intermodal for the week ending November 3 reached 224,467 trailers and containers for a 6.2 percent annual decrease. This was below the previous two weeks, which came in at 253,186 and 253,883, respectively.
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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