AAR says 2010 volumes show gains over 2009
January 12, 2011 - LM Editorial
In 2010, carload and intermodal volume rebounded from a trying 2009, but volumes are still below pre-recession levels, according to data from the Association of American Railroads (AAR).
Total carload volume in 2010 at 14,820,128 was up 7.3 percent year-over-year over 2009’s roughly 13.8 million carloads. Intermodal volume at 11,282,336 trailers and containers was up 14.2 percent year-over-year compared to 2009’s roughly 9.9 million trailers and containers.
AAR officials said that the annual carload and intermodal percentage gains in 2010 are the largest ones since AAR began its data series in 1998. But they cautioned that 2010 was the second lowest annual carload total on record next to 2009, and it said that the combined increase in total annual carloads and intermodal trailers and containers is equivalent to roughly 20,000 additional trains moving in 2010 compared to 2009.
“Like the economy in general, rail traffic in 2010 recovered some lost ground, but not nearly all of it,” said AAR Senior Vice President John T. Gray, in a statement. “That being said, monthly rail traffic increases were broad based, supporting the idea that economic recovery likewise is broad based.”
A leading railroad analyst told LM that 2010 volumes were much stronger than the market expected throughout the course of the year.
“A recovery was expected but all summer long, people were waiting for it to plummet,” said Anthony B. Hatch, principal of ABH Consulting. “The low trough [for volumes] was May 2009 so starting after that we expected to see compression in the year-over-year numbers, because we were increasingly going against more difficult comparisons. These still are not anywhere the 2008 numbers, which is commonly used as a benchmark, but truly the 2006 numbers represent the last peak. We are still short of that, but it is a much stronger recovery at this point.”
On top of this recovery were concerns about European currency, high unemployment and the fallout of the Wall Street meltdown in the fourth quarter of 2008, said Hatch. And 2010 numbers are better than the numbers that came in during January 2010 and June 2010, with cautious optimism continuing to be the theme since the first quarter of 2009.
A concern for future railroad growth cited by Hatch is a lack of visibility by railroad customers, although there is also a loosening of purse strings by non-railroad companies, whereas railroads have generally been heavily active in capital expenditures-related investing for system, maintenance, and infrastructure improvements.
“We are beginning to get normal again,” said Hatch. “When the railroads begin reporting earnings soon, I don’t think you will see a lot of strong volume expectations. If anything, you will see railroads express frustration a little bit at a lack of visibility from customers. Since the fourth quarter of 2008, things have been in a ‘wait and see type of mode.’”
The AAR said that all 19 cargo commodities it tracks were up in 2010 compared to 2009, even though volumes across the board were down compared to 2008. Metallic ores were up 154,595 carloads at 92 percent, metals and metal products were up146,957 carloads at 44.9 percent, and chemicals were up 131,127 carloads at 9.6 percent.
Not surprisingly, coal represented 45.4 percent of non-intermodal U.S. carloads at 6,730,153 carloads, which was up 1.2 percent from 2009 and down 9.8 percent from 2008. Rounding out the top three commodity carload totals in 2010 were chemicals at 1,497,095 for a 9.6 percent annual gain and 10.1 percent of non-intermodal carloads, and grain at 1,149,855 for a 10.8 percent annual bump and 7.1 percent of non-intermodal carloads.
Intermodal containers at 9,574,970 were up 16.3 percent from 2009 and represented 84.9 percent of all intermodal traffic. Intermodal trailers at 1,707,366 were up 4.1 percent.
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