Railroad shipping: AAR June volumes are a mixed bag

Rail traffic is up year-over-year in June but remains below 2008 levels.

By ·

As in previous months in 2010, June rail carload totals were a mixed bag, according to data published by the Association of American Railroads (AAR).

The AAR reported that monthly rail carloads for June—at 1,415,630—were up 10.6 percent year and down 10.2 percent from 2008. June carloads were down 1.3 percent compared to May, which was down 1.1 percent compared to April. U.S. carloads averaged 283,126 carloads per week in June, down from 288,419 in May and 294,758 in April.

Intermodal traffic in June—at 1,101,333 containers and trailers—was up 19.2 percent from June 2009 and down 1.4 percent from June 2008. And the AAR said the weekly average of 220,267 trailers and containers was its highest since October 2008, topping the previous high compared to October 2008 from May, which hit 216,879 trailers and containers.

The AAR said that average weekly container volume in June was the ninth highest since 1980. 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.

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 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. June rail traffic, according to the AAR, is consistent with an economy that is in far better shape that it was nine-to-12 months ago.

“While June traffic shows signs of an economy that is in better shape than it was a year ago, we still have a long way to go to see rail traffic levels associated with a full recovery,” said AAR Senior Vice President John Gray, in a statement. “For example, both the Purchasing Managers Index and consumer confidence fell in June.”

Overall economic activity is likely to remain bumpy over the next several months, due largely to a shaky unemployment outlook and sluggish consumer spending. The AAR’s monthly Rail Time Indicators report noted that while the U.S. unemployment rate dipped from 9.7 percent in May to 9.5 percent in June, railroad employee numbers grew to 149,967 employees in May 2010 from 149,749 in April 2010, the most recent month for which data is available. 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.

Of the 18 major commodities tracked by the AAR, 16 saw carload gains on an annual basis. Coal continued a modest recovery with a 2.1 percent gain. Grain was up 11.9 percent, and motor vehicles and parts were up 50.9 percent. Grain mill products were down 7.1 percent, and farm products excluding grain were down 2.9 percent.


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!

Article Topics

Rail Freight · Railroad · All Topics
Latest Whitepaper
Lead your organization through the driver shortage and over-the-road regulations.
Potential transportation disruptions are looming as increased over-the-road regulations are set to go into effect in 2017. Experts believe these regulations will further impact the already challenged driver pool as well as reduce driver productivity.
Download Today!
From the January 2017 Issue
Following LM tradition, we start off the New Year with our annual “Rate Outlook” cover story and subsequent Webcast
Moore on Pricing: The other TMS functional options
2017 Rate Outlook: Where are freight transportation rates headed?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2017 Rate Outlook: Where are freight transportation rates headed?
Join our panel of top oil and transportation analysts for an exclusive look at where rates are headed and the issues driving those rate increases over the coming year.
Register Today!
EDITORS' PICKS
2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...
Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...

Making the TMS Decision: Ariens Finds Just the Right Fit
The third time is the charm for this U.S. manufacturer on the hunt for a third-party logistics (3PL)...
Motor Carrier Regulations Update: Caught in a Trap
The fed is hitting truckers with a barrage of costly regulations in an era of scant profits....