Railroad shipping: AAR reports carload and intermodal volumes up for week ending October 16

Railroad volumes for the week ending October 16 showed continued year-over-year improvement, according to data released by the Association of American Railroads (AAR).

Carload volume at 303,664 was up 10.1 percent year-over-year and was ahead of the 297,029 carloads reported by the AAR for the week ending October 9, said the AAR. This tally is also in line with carload totals for previous weeks, including the week ending October 2, which hit 299,394 carloads and the week ending September 25 at 300,908 carloads and the week ending September 18 at 304,679 carloads.

Carload volume in the East was up 5.8 percent year-over-year. Out West, carloads were up 13.1 percent year-over-year.

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. Last week, the AAR said it will no longer include 2008 annual comparisons in its week volume releases, because “October 2008 marked the beginning of the recession-related downturn in rail traffic.”

But as LM has reported, even with railroads in recovery mode, current volumes are still below peak levels, and annual gains occurring in 2010 are against a 2009 which has been described as the worst year for railroad traffic since deregulation, according to industry analysts.

Data from Avondale Partners, though, suggests positive growth is looming, with weekly U.S. carloads are now just 9.9% below the recent peak in April 2008, while Intermodal units are just 3.7% off their September 2008 peak.

Intermodal, which has been gaining strength for the majority of 2010, hit 237,180 trailers and containers for the week ending October 16 for a 15.1 percent annual gain, along with topping the week ending October 9 at 232,272. The week ending October 16 was below the week ending October 2 at 240,252 trailers and containers and also fell short of the week ending September 25 at 241,167—a 2010 high.

Container volume at 202,254 was up 15.8 percent, and trailer volume at 34,926 was up 11.1 percent.

Intermodal marketing company executives say that shippers are turning to intermodal more as a cost-effective and efficient alternative to trucking. And as volumes increase, railroads and IMC’s need to focus on maintaining high service levels for shippers, they said.

This much was evident in recent third quarter earnings releases by CSX and Union Pacific, which both pointed to strong intermodal performance throughout the third quarter, with the expectation that it will continue.

In comments about his company’s excellent third quarter performance in which net income rose 51 percent to $778 million, Union Pacific Chairman and CEO Jim Young said that as the economy continues to recover, UP is ready to safely and reliably haul more freight, adding that the long-standing need for freight rail transportation in the U.S. provides Union Pacific with a stable foundation as well as a platform for future growth.

Year-to-date, total U.S. carload volumes at 11,728,926 carloads are up 7.3 percent year-over-year. Trailers or containers at 8,896,158 are up 14.7 percent year-over-year.
Of the 19 carload commodities tracked by the AAR, 14 were up year-over-year. Metallic ores were up 183.2 percent, and stone, clay and glass products were up 32 percent.

Weekly rail volume was estimated at 34.8 billion ton-miles, an 11.5 percent year-over-year increase. And total volume year-to-date at 1,292.6 billion ton-miles was up 8.5 percent year-over-year.