August rail volumes are mixed, says AAR

By Jeff Berman, Group News Editor
September 07, 2010 - LM Editorial

August rail carload totals were again a bit of a mixed bag, according to data published by the Association of American Railroads (AAR).

The AAR reported that monthly rail carloads for August—at 1,179,447—were up 5.7 percent year-over-year and down 11.6 percent from 2008. August carloads were down 1.6 percent compared to July on a seasonally adjusted basis. But U.S. carloads averaged 294,862 carloads per week in August, which is its highest level since November 2008. What’s more, the last week of August brought the highest U.S. rail carload total—at 302,358—for any week to date in 2008.

Intermodal traffic in July—at 938,573 containers and trailers—was up 19.7 percent year-over-year and down 0.3 percent compared to 2008. The AAR said the weekly average of 234,643 trailers and containers was marks the highest weekly average since October 2008. This output tops July’s total of 883,593 containers and trailers and its 220,998 weekly average. And like the carload side, the last week of August—at 237,194 trailers and containers—marked the highest weekly level of 2010 to date. Total intermodal traffic was up 0.6 percent from July.

Domestic intermodal traffic continues to see strong sequential growth due in large part to conversions of over-the-road domestic traffic to rail and to growth in international trade.

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.

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.

As LM has reported, while railroad activity is clearly picking up compared to a dismal 2009, it is still lagging 2008 and earlier years on an absolute volume basis. And based on various economic indicators it is clear it will be a while more until rail volumes return to the same levels as previous years.

“It is very difficult right now for anyone to forecast the economy’s path. We also know from experience that things can change very quickly,” said AAR Senior Vice President John T. Gray in a statement. “That said, there is little in last month’s rail traffic data that would indicate economic recovery has stalled. While a faster recovery path would be attractive to railroads and our customers, the data so far show a slow measured recovery is probably continuing.”

Of the 18 major commodities tracked by the AAR, 15 saw carload gains on an annual basis. Motor vehicles and parts were up 15.6 percent, and primary forest products were down 4.4 percent.

Railroad employee numbers grew to 153,046 employees in July 2010 (the most recent month for which data is available) from 151,527 in June 2010, with U.S. Class I railroads adding 7,400 employees over the last six months. And the AAR said 10,759 rail cars were brought back into service in August, with 348,712 cars—or 22.7 percent—of the North American railcar fleet currently remaining in storage, it said.

“The pessimism we hear about the durability of the recovery does not apply to the rails,” said Anthony B. Hatch, principal of ABH Consulting, in a recent interview. “And, with rail traffic a coincident indicator, perhaps we should take more heart about the economy.  Rail traffic has remained shockingly strong, well after the May ’09 trough comparisons.”



About the Author

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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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Article Topics

News · Intermodal · AAR · Carload · All topics

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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