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AAR reports rail volumes for week ending July 17 are up

By Jeff Berman, Group News Editor
July 23, 2010

Railroad volumes for the week ending July 17 were down year-over-year and up compared to 2008, according to the Association of American Railroads (AAR).

Weekly carload volumes—at 282,199—were up 3.5 percent compared to 2009 and down 13.8 percent compared to 2008. This topped the week ending July 10, which hit 252,963 carloads and included the July 4 holiday. The week ending April 24, which hit 294,218 carloads, is the highest weekly carload level since December 2008, according to the AAR.

In October 2009, the AAR began reporting weekly rail traffic with year-over-year comparisons for the previous two years, due to the fact that the economic downturn was in full effect at this time a year ago, and global trade was bottoming and economic activity was below current levels.

Carload volume in the East was up 3.8 percent year-over-year and down 15.7 percent compared to 2008. And out West carloads were up 6.7 percent year-over-year and down 12.4 percent compared to 2008.

Intermodal traffic—at 227,661 trailers and containers—was up 20.1 percent year-over-year and down 2.5 percent compared to 2008, which continues to close the gap between current and 2008 intermodal volumes. It remained the week ending July 3, which hit 231,286 trailers and containers and was its highest output since week 42 of 2008.

Domestic intermodal performance has been on a roll of late, due, in part, to a tightening of truckload capacity, which has some shippers converting to intermodal. This is indicative, said the AAR, of a years-long trend of domestic freight converting from truck trailers to containers on rail; truck trailers can be double-stacked, which makes them more cost-efficient and effective.

While the strong economic momentum from the end of 2009 through mid-June has somewhat abated, the rail industry is overall very optimistic about its future prospects, as evidenced in recent Class I railroads second quarter earnings results, which saw strong gains in pricing, volumes, and revenue per unit.

As LM has previously reported rail industry stakeholders remain optimistic about railroad growth throughout the remainder of 2010. Among the things they have pointed to include increased industrial production growth in the form of manufacturing and new orders indices, as well as gradual consumer spending, among other factors, as drivers for these gains. But even though volumes are slowly recovering, they are still well below previous peak levels.

And volumes are likely to remain strong on a year-over-year basis until at least mid-summer for most of the major carload categories, wrote Avondale Partners analyst Donald Broughton in a research note.

On a year-to-date basis, total U.S. carload volumes at 7,874,125 carloads are up 7.3 percent year-over-year and down 13.2 percent compared to 2008. Trailers or containers at 5,855,507 are up 13.1 percent year-over-year and down 6.4 percent compared to 2008.

Of the 19 carload commodities tracked by the AAR, 11 were up year-over-year. Metallic ores were up 208.4 percent and coke loadings were up 22.5 percent.

Weekly rail volume was estimated at 30.8 billion ton-miles, a 5.8 percent year-over-year increase. And total volume year-to-date at 866.5 billion ton-miles was up 8.8 percent year-over-year.

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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