Railroad shipping: AAR reports rail volumes remain up but have leveled off

Following 12 straight weeks of traffic growth, the Association of American Railroads reported that volumes for the week ending May 20 have leveled off, although they remain up on an annual basis.

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Following 12 straight weeks of traffic growth, the Association of American Railroads reported that volumes for the week ending May 20 have leveled off, although they remain up on an annual basis.

Weekly carload volumes—at 288,114—were up 10.6 percent year-over-year and down 12.4 percent from 2008. This trails the week ending May 15 which came in at 290,263 and is nearly even with the week ending May 8 at 288,905. The week ending April 24, which hit 294,218 carloads, is the highest weekly carload level since December 2008, according to the AAR.

Carloads in the West were up 8.6 percent year-over-year and down 8.1 percent compared to 2008. And in the East carloads were up 13.6 percent year-over-year and down 17.9 percent compared to 2008.

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.

Intermodal container and trailer volumes—at 215,118 trailers and containers—were up 12.7 percent year-over-year and down 7.9 percent from 208. This trails the week ending May15, which hit 218,206 (marking the highest week for total intermodal volume since the 47th week of 2008). Total intermodal loadings were above the weeks ending May 8 and May 1, which hit and 208,809 and 213,013

Intermodal container volume was up 14.4 percent year-over-year and down 0.7 percent compared to 2008. Intermodal trailer volume was up 3.9 percent year-over-year and down 34.4 percent compared to 2008. 

Robert W. Baird and Co. analyst Jon Langenfeld wrote in a research note that intermodal is well-positioned for continued growth.

“We expect both domestic and international growth to continue given ongoing domestic truckload conversion and economic growth,” Langenfeld wrote. “Tightened intermodal container capacity should support intermodal rail rate increases.”

And Avondale Partners analyst Donald Broughton pointed out that on a three-week average basis, total US carloads are up 13.9% from prior year levels. Broughton said he expects this comparison to continue to improve until about mid-year his firm compares data to a relatively soft spring on a year-ago basis.

As LM has reported, recent railroad volume growth could lead to a bright picture for the remainder of 2010, according to industry analysts.

These analysts have cited increased industrial production growth in the form of manufacturing and new orders indices, as well as gradual consumer spending, among other factors, as drivers for these gains.

On a year-to-date basis, total U.S. carload volumes at 5,636,940 carloads are up 6.5 percent year-over-year and down 13.7 percent compared to 2008. Trailers or containers at 4,108,176 are up 10.4 percent year-over-year and down 8.1 percent compared to 2008.

The strong sequential growth in recent weekly railroad volumes serves as confirmation of previous so-called “green shoots” that railroad volumes were rebounding, according to industry experts.

Of the 19 products tracked by the AAR, 15 were up year-over-year, with metallic ores up 10.2 percent and metals up 79.7. Farm products excluding grain were down 12.2 percent.

Weekly rail volume was estimated at 32.1 billion ton-miles, an 11.8 percent year-over-year gain. And total volume year-to-date at 618.0 billion ton-miles was up 7.5 percent year-over-year.
 


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

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