AAR reports rail volumes for week ending July 24 are up

By Jeff Berman, Group News Editor
August 02, 2010 - LM Editorial

Like the preceding week, railroad volumes for the week ending July 24 were down year-over-year and up compared to 2008, according to the Association of American Railroads (AAR).

Weekly carload volumes—286,854—were up 4.7 percent year-over-year and down 13.5 percent compared to 2008. This edged the week ending July 17 at 282,199 and the week ending July 10, which hit 252,963 carloads and included the July 4 holiday. The week ending April 24, which hit 294,218 carloads, is the highest weekly carload level since December 2008, according to the AAR.

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.

Carload volume in the East was up 4.3 percent year-over-year and down 16.4 percent compared to 2008. And out West carloads were up 4.9 percent year-over-year and down 11.5 percent compared to 2008.

Intermodal traffic—at 230,443 trailers and containers—was up 19.2 percent year-over-year and down 2.1 percent compared to 2008, which continues to close the gap between current and 2008 intermodal volumes. It remained slightly behind the week ending July 3, which hit 231,286 trailers and containers and was its highest output since week 42 of 2008. Intermodal container volume was up 6.4 percent compared to 2008 and trailer volumes were off by 33.4 percent.

As LM has reported, domestic intermodal performance has been on a roll of late, due, in part, to a tightening of truckload capacity, which has some shippers converting to intermodal. 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.

While the strong economic momentum from the end of 2009 through mid-June has somewhat abated, the rail industry is overall very optimistic about its future prospects, as evidenced in recent Class I railroads second quarter earnings results, which saw strong gains in pricing, volumes, and revenue per unit.

And rail industry stakeholders remain optimistic about railroad growth throughout the remainder of 2010. Among the things they have pointed to include 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. But even though volumes are slowly recovering, they are still well below previous peak levels.

While volumes remain below these previous peak levels, they will likely face tougher year-over-year comparisons through the remainder of 2010, given the fact that 2009 was a down year for the rails in terms of volume growth.

“Although we continue to expect strong results for the next few months, the [annual] comps will no longer be as easy as they were in the second quarter,” wrote Avondale Partners analyst Donald Broughton in a research note.

On a year-to-date basis, total U.S. carload volumes at 8,160,979 carloads are up 7.2 percent year-over-year and down 13.2 percent compared to 2008. Trailers or containers at 6,085,950 are up 13.3 percent year-over-year and down 6.3 percent compared to 2008.

Of the 19 carload commodities tracked by the AAR, 15 were up year-over-year. Metallic ores were up 56.3 percent and metals & products were up 31.2 percent.

Weekly rail volume was estimated at 31.6 billion ton-miles, a 6.4 percent year-over-year increase. And total volume year-to-date at 898.1 billion ton-miles was up 8.3 percent year-over-year.



About the Author

Jeff Berman headshot
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. .(JavaScript must be enabled to view this email address).


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About the Author

Jeff Berman, 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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