Rail Week Ending October 2017: Finally A Good Week

Week 40 of 2017 shows same week total rail traffic (from same week one year ago) improved according to the Association of American Railroads (AAR) traffic data. The economically intuitive sectors are now back into expansion.

Analyst Opinion of the Rail Data

We review this data set to understand the economy. If coal and grain are removed from the analysis, this week it improved 6.8 % (meaning that the predicitive economic elements improved year-over-year). This week the one year rolling averages continue in expansion for the 19th week after contraction beginning in late 2015.

The strength this week continues to be intermodal intermodal – which is economically positive (and is contrary to the slowness of the economically intuitive carload counts).

The following graph compares the four week moving averages for the rail economically intuitive sectors (red line) vs. total movements (blue line): Rail’s intuitive sectors have been bouncing around the zero growth line for most of 2017.

This analysis is looking for clues in the rail data to show the direction of economic activity – and is not necessarily looking for clues of profitability of the railroads. The weekly data is fairly noisy, and the best way to view it is to look at the rolling averages (carloads [including coal and grain] and intermodal combined).

  Percent current rolling average is larger than the rolling average of one year ago Current quantities accelerating or decelerating Current rolling average accelerating or decelerating compared to the rolling average one year ago 4 week rolling average +2.1% accelerating accelerating 13 week rolling average +2.2 % accelerating accelerating 52 week rolling average +3.3 % accelerating accelerating

A summary of the data from the AAR:

For this week, total U.S. weekly rail traffic was 554,826 carloads and intermodal units, up 6.3 percent compared with the same week last year.

Total carloads for the week ending October 7 were 269,336 carloads, up 2 percent compared with the same week in 2016, while U.S. weekly intermodal volume was 285,490 containers and trailers, up 10.8 percent compared to 2016.

Seven of the 10 carload commodity groups posted an increase compared with the same week in 2016. They included nonmetallic minerals, up 5,064 carloads, to 40,402; chemicals, up 3,006 carloads, to 31,190; and metallic ores and metals, up 1,680 carloads, to 21,299. Commodity groups that posted decreases compared with the same week in 2016 were coal, down 2,681 carloads, to 87,521; grain, down 2,111 carloads, to 24,741; and motor vehicles and parts, down 1,747 carloads, to 17,194.

For the first 40 weeks of 2017, U.S. railroads reported cumulative volume of 10,375,996 carloads, up 3.7 percent from the same point last year; and 10,718,042 intermodal units, up 3.6 percent from last year. Total combined U.S. traffic for the first 40 weeks of 2017 was 21,094,038 carloads and intermodal units, an increase of 3.7 percent compared to last year.