AAR reports annual carload and intermodal gains for 2014

In a year in which United States-based railroads saw more than its fair share of issues, due largely to poor weather, congestion and service problems, annual growth was solid, according to data released by the Association of American Railroads (AAR).

On the carload side, the AAR said that total U.S. rail carloads increased 3.9 percent, or 567,554 carloads, to 15,176, 835 in 2014, which is the highest annual level for U.S. rail carloads since 2008.

Intermodal also saw strong results, increasing 5.2 percent over 2013, or 665,630 containers and trailers, to 13,496,941 total intermodal units in 2014. This stands as a new annual record, topping 2013’s 12,831,692.

“2014 was a challenging year for America’s freight railroads as they responded to traffic surges and shifts in traffic patterns,” said AAR Senior Vice President of Policy and Economics, John T. Gray, in a statement. “This will be another busy year as the economy continues to grow and the nation’s railroads work to be responsive, flexible and efficient for their customers.”

This annual tally reflects a consistent theme echoed by the AAR that it is much more cost effective to move rail intermodal shipments in containers than in trailers, largely because containers can be double-stacked and are easier to load onto and take off a railroad flat car than trailers.

But while intermodal growth is strong, John Larkin, Stifel Nicolaus analyst, observed in a research note that “this growth has occurred despite horrific service levels provided by the rails due to congestion issues, lack of sufficient locomotive power, lack of sufficient crews, and because of the trucking industry’s inability to marshal much incremental capacity,” adding that “shippers have been patient with the railroads, but this patience is predicated upon service levels returning to those generated in 2012. The implication was that once service levels return to previous levels, shippers have more freight
they would like to channel in the direction of the intermodal option. With truckers struggling to find driving talent and inadequate highway infrastructure funding, the future of intermodal remains bright. But, again, that bright future is contingent upon a return to more truck-like service levels.

Of the 20 carload commodity categories tracked by the AAR, 18 saw annual increases in 2014. Grain was up 13.5 percent or 125,954 carloads, crushed stone, sand and gravel increased 11.6 percent or 122,567 carloads, and petroleum and petroleum products, which continue to perform strongly, due to the ongoing emergence of moving crude oil by rail (CBR), saw a 12.7 percent annual increase or 90,185 carloads. Coal increased 1 percent or 55,554 carloads.