AAR says July volumes show some improvement

As in previous months in 2010, July rail carload totals were somewhat uneven, according to data published by the Association of American Railroads (AAR).

By ·

As in previous months in 2010, July rail carload totals were somewhat uneven, according to data published by the Association of American Railroads (AAR).

The AAR reported that monthly rail carloads for July—at 1,112,308—were up 4.1 percent year-over-year and down 14.6 percent from 2008. July carloads were up 3.2 percent compared to June. U.S. carloads averaged 280,577 carloads per week in July, down from 283,126 in June and 288,419 in May and 294,758 in April.

Intermodal traffic in July—at 883,593 containers and trailers—was up 17.3 percent year-over-year and down 5.1 percent compared to 2008. The AAR said the weekly average of 220,998 trailers and containers was up slightly from June’s 220,267, marking the highest weekly average since October 2008 and a 17.3 percent gain compared to July 2009.
The AAR said that U.S. intermodal volumes—for their average unadjusted weekly trailer and container traffic—have gone up for five straight months, due in large part to conversions of over-the-road domestic traffic to rail and to growth in international trade. 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.

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.

As LM has reported, while railroad activity is clearly picking up compared to a dismal 2009, it is still lagging 2008 and earlier years on an absolute volume basis. And based on various economic indicators it is clear it will be a while more until rail volumes return to the same levels as previous years.

And while carloads have seen some sequential declines in recent months, AAR officials cautioned that this does not indicate it is the beginning of a steep volume decline either. They added that an economy several months into a recovery from the worst recession in decades should be yielding rail traffic levels heading north, not south.

As an example, AAR officials pointed out that July’s increase in seasonally-adjusted carloads is a continuation of an upward trend—replete with some “zigs and zags”—that began about a year ago. They noted that in the 14 months since May 2009 seasonally-adjusted rail carloads have gone up on a sequential basis in eight of those months and are down in six, with the average percentage increase for months that saw gains at 3.3 percent, which is more than double the average decrease of -1.4 percent for the six months that saw carload reductions.

“We typically see a lull in some categories of traffic this time of year, so looking at seasonally adjusted data may be more helpful in gauging rail traffic this month,” said AAR Senior Vice President John Gray, in a statement. “Coal and autos are the two commodities most often affected by seasonal issues in July, and both saw seasonally adjusted traffic gains last month.”

Of the 18 major commodities tracked by the AAR, 15 saw carload gains on an annual basis. Coal continued a modest recovery and was basically flat in July with a 0.4 percent decline. Motor vehicles and parts were up 15.7 percent. Food products were down 4.2 percent.

As has been the case for several months, overall economic activity is likely to remain bumpy over the next several months, due largely to a shaky unemployment outlook and sluggish consumer spending. With unemployment at 9.5 percent in June and July, railroad employee numbers grew to 151,527 employees in June 2010 (the most recent month for which data is available) from 149,967 in May 2010. And following a relatively low 747 cars being brought back in service in May, the AAR said 3,064 rail cars were brought back into service in June, followed by 5,808 cars brought back in July. This leaves available railcar capacity at about 23.4 percent, said the AAR.

“The pessimism we hear about the durability of the recovery does not apply to the rails,” said Anthony B. Hatch, principal of ABH Consulting. “And, with rail traffic a coincident indicator, perhaps we should take more heart about the economy.  Rail traffic has remained shockingly strong, well after the May ’09 trough comparisons.”


About the Author

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. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
Managing Global Transportation: How NVOCCs can operate more profitably
Global transportation isn’t getting any easier to manage. With new rules and regulations to learn, new compliance requirements to adhere to, and new customers and business partners to onboard, navigating the complexities of the global market can be difficult for any company. To fully leverage their global supply chains, firms need a robust, global transportation management system that helps them navigate this ever-changing environment.
Download Today!
From the July 2016 Issue
While it’s currently a shippers market, the authors of this year’s report contend that we’ve entered a “period of transition” that will usher in a realignment of capacity, lower inventories, economic growth and “moderately higher” rates. It’s time to tighten the ties that bind.
2016 State of Logistics: Third-party logistics
2016 State of Logistics: Ocean freight
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....

Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...
Port of Oakland launches smart phone apps for harbor truckers
Innovation uses Bluetooth, GPS to measure how long drivers wait for cargo