March 2012 carload and intermodal volumes are mixed, says AAR

By Jeff Berman, Group News Editor
April 06, 2012 - LM Editorial

In a month which saw its fair share of mixed weekly volumes, March 2012 ended up in the same condition, according to data released by the Association of American Railroads (AAR).

March carloads—at 1,123,298—were down 69,190 carloads or 1.9 percent annually. Intermodal—at 928,350 trailers and containers—was up 31,348 units or 2.4 percent compared to March 2011.

Of the 20 commodity categories tracked by the AAR, 12 were up in March. Leading the way were petroleum and petroleum products, which were up 9,052 carloads or 34.2 percent and motor vehicles and parts, which were up 9,032 carloads or 15.3 percent. Commodities on the decline in March included coal, which was down 84,854 carloads or 15.8 percent compared to March 2011. Grain was down 9,088 carloads or 9.7 percent. AAR officials stated that carloads excluding coal and grain were up 4.4 percent or 24,752 carloads in March 2012 over March 2011.

“There is no denying that coal is a crucial commodity for railroads, and there’s also no denying that recent declines in coal traffic are presenting significant challenges to railroads right now,” said AAR Senior Vice President John T. Gray in a statement.  “That said, it’s encouraging that many commodities that are better indicators of the state of the economy than coal is—things like motor vehicles, lumber and wood products, and crushed stone—saw higher rail carloadings in March.”

Class I employment fell to 159,228 in February 2012 (the month for which most recent data is available, which was down 105 employees from January 2012.  The AAR added that total Class I employment was 4,726 employees, which marked a 3.1 percent gain over February 2012 compared to February 2011. 

For the week ending March 31, the AAR reported that carloads—at 286,962—were down 6.2 percent annually. And intermodal—at 247,772—was up 3.6 percent annually.  And for the first 12 weeks of 2012, the AAR said that U.S. railroad carloads were down 2.5 percent at 3,679,090, while intermodal was up 2.5 percent at 2,928,445 trailers and containers.

“The modest level of overall carload growth is masking some excellent progress across many commodities,” said FTR Associates Senior Consultant Larry Gross. “Total volume has been held down by lackluster performance in the important commodities of coal and grain.  Setting these aside, carload activity is showing broad-based strength indicating an improving economic outlook.  Coal is suffering from a combination of immediate and long-term issues.  In the near-term, coal carloads are being hurt by the warm winter weather and weaker export coal demand as competing international sources come back on stream.  Long term, utility coal will be constrained by growth in natural gas generating capacity fueled by low-priced natural gas.  This, combined with tightening environmental regulations, will decrease reliance on older, high cost coal generating facilities.  Grain shipments have also be affected by weaker export demand.  On the plus side, strong growth is being recorded in such important areas as motor vehicles and metal products.  Oil-shale related development is fueling strong growth in shipments of petroleum and frack sand.  Even lumber shipments, while still low on an absolute basis, have been showing strong year-over-year growth.”



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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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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