U.S. rail carload and intermodal units are down in July, reports AAR

United States rail carload and intermodal volumes each saw annual declines in July, according to data issued this week by the Association of American Railroads (AAR).

Rail carloads­­–at 1,264,100-were down 4.8%, or 64,406 carloads annually. And the AAR said that six of the 20 carload commodity categories it tracks saw annual gains, including: petroleum & petroleum products, up 6,465 carloads or 11.5 percent; all other carloads, up 2,866 carloads or 9.9 percent; and metallic ores, up 2,456 carloads or 7.7 percent. Commodities that saw declines in July 2019 from July 2018 included: coal, down 43,954 carloads or 10.3 percent; crushed stone, sand & gravel, down 6,350 carloads or 5.1 percent; and primary metal products, down 4,884 carloads or 9.9 percent. When excluding coal, carloads were down 20,452 carloads, or 2.3% annually and when excluding coal and grain, carloads were down 16,794 carloads, or 2.2%.

Intermodal containers and trailers-at 1,314,333 containers and trailers were down 6.1%, or 84,878 units, annually.

“Rail traffic in July, as in many other recent months, was held back by declines in three of the largest rail traffic segments, coal, grain, and intermodal,” said AAR Senior Vice President of Policy and Economics John T. Gray in a statement. “Despite a summer heat wave of historical proportions, very low prices for natural gas have seriously weakened the seasonal demand for coal-generated electrical power. These same low natural gas prices appear to have allowed chemical production to pretty much hold steady even in the face of the uncertainty around foreign trade, which has been the source of much of the recent growth in chemical production. With fifty percent of rail intermodal business, which is overseas - including international trade, both imports of consumer and intermediate manufacturing components and exports such as food products - trade policy uncertainty continues to drag down this traffic segment. Export grain movements are also facing increasingly serious headwinds from threats to trade policy stability.”

Through the first seven months of 2019, AAR noted that rail carloads-at 7,816,318-were off 3.2%, or 259,574 carloads, annually, and intermodal units-at 8,238,594-slipped 3.7%, or 314,125 containers and trailers-annually.

For the week ending August 3, U.S. rail carloads dropped 4.9% annually to 266,439, and intermodal units were down 5.5% to 275,119.