November carload and intermodal volumes post annual gains in November, reports AAR

The Association of American Railroads (AAR) reported this week that United States carload and intermodal volumes for the month of November both saw annual gains.

Carloads—at 1,161,820—were up 1.4 percent, or 16,396 carloads, compared to November 2013.

Of the 20 commodity categories the AAR watches, 11 were saw annual gains in November. Crushed stone, sand, and gravel was up 12,960 carloads or 16.8 percent, and metallic ores rose by 5,241 carloads or 19.8 percent. Petroleum and petroleum products were up 4,432 carloads or 7.6 percent.

Intermodal volumes were up 2.7 percent––or 27,463 units––at 1,035,054 containers and trailers, with the weekly average for the month––at 258, 764––now the highest recorded weekly average of any November during the entire time AAR has tracked this data. Intermodal continues to perform well over all, especially on the domestic side and is benefiting from multiple themes, including globalization, trade, cost advantages over trucking, low fuel prices, and truck driver shortage-related issues, according to Tony Hatch, principal of New York-based ABH Consulting.

“It’s not always easy to tell from available indicators how the economy is performing and that is true for rail traffic in November when some traffic categories showed solid growth, others not so much,” said AAR Senior Vice President John T. Gray in a statement.  “A healthy and efficient freight rail network is vital to delivering America’s changing economy. Today, railroads are moving more traffic than at any time since 2007.”

The strong over all performance in volumes for November comes at a time when railroad service is seeing gradual signs of improvement. As reported yesterday, AAR President and CEO Ed Hamberger said at the recent RailTrends conference hosted by Progressive Railroading and Hatch that major changes in traffic commodity mix, with two record grain markets and gains in domestic intermodal, too, all were factors impacting rail service in 2014, as well as last year’s harsh winter weather.

But even with things getting better, many shippers maintain that current service levels are still below where they need to be.

Hatch stated in a research note that service on the rails should improve by spring.

“Railroads ‘get it’ – they see the problems, and they see the opportunity if they address them,” he wrote. “We continue to expect significant trend-line improvement by the Spring (assuming a “normal” – ie; hard – winter). The rails have plans already in practice to add network capacity (BNSF, NSC, and CSX), purchase locos where they can, and bring on trained T&E employees (NSC and CNI focused on this in particular).  Capex will continue to top be at high levels, as a learned lesson from the current fluidity situation.”

For the week ending November 29, the AAR said that U.S. carloads were up 6.2 percent at 271,659, and intermodal was also up 6.2 percent at 220,873 containers and trailers.

Through the first 11 months of 2014, carloads are up 3.4 percent annually at 13,992,560, and intermodal is up 5.2 percent at 12,494,133 containers and trailers.