The theme of opposite directions could serve as the theme for rail carload and intermodal volumes for the month of April, based on data issued by the Association of American Railroads (AAR) this week.
United States carloads dipped 5.3 percent, or 78,712, annually, to 1,403,044, with 5 of the 20 commodity categories tracked by the AAR up annually. Metallic ores were up 43.3 percent or 9,838 carloads, and grain mill products were up 2.3 percent or 1,124 carloads. Coal carloads dropped 11.1 percent or 63,306 carloads, and grain was off 3.7 percent or 3,910 carloads. On a year-to-date basis through the first four months of 2015, carloads were down 1.4 percent, or 68,367 carloads, to 4,770,126 compared to April 2014.
Intermodal containers and trailers saw a 5.1 percent annual jump in April, up 67,513 units to 1,383,314. Year-to-date through April, intermodal is up 1.6 percent, or 69,588 containers and trailers, to 4,401,912 units. And total U.S. rail traffic volume of 9,172,038 carloads and intermodal units eked out a tiny annual gain of 0.01 percent or 1,1221 carloads and intermodal units compared to the first four months of 2014.
An industry analyst told LM that carload traffic will continue to grow at a rate approximately on par with GDP with higher growth in the Gulf region as low natural gas prices provide cheap feedstock for chemical and plastics producers., adding that auto demand particularly will remain relatively strong as well.
“The federal government recently announced that its initial estimate of first quarter GDP growth was just 0.2 percent. Based on rail traffic in April, we aren’t seeing a surge in economic activity to start the second quarter,” said AAR Senior Vice President John T. Gray in a statement. “Railroad coal traffic is suffering from reduced electricity generation from coal and lower coal exports, while rail volumes for a number of other commodities are down due to general economic weakness. We hope that turns around. Intermodal, on the other hand, is doing very well, as large intermodal-related investments and service improvements are paying off with record volumes.”
The improvement in intermodal service has been intact over the last several months, with another harsh winter in the past, coupled with subsequent gains in network velocity. What’s more, intermodal is also seeing benefits of slowly-improving throughput for cargo coming out of West Coast ports, which was largely stalled through the end of February for about nine months leading up to that, due to the West Coast port labor disruption. And an improving economy and the ongoing driver shortage situation, which has resulted in tight capacity (which has loosened up in recent months) environment that also favors intermodal conversion by shippers, too.
For the week ending May 2, U.S. carloads were down 4.8 percent annually at 283,091, and intermodal was up 5.7 percent at 282,696 containers and trailers.