Rail Week Ending 20 January 2018: Terrible Start To 2018

Week 3 of 2018 shows same week total rail traffic (from same week one year ago) contracted according to the Association of American Railroads (AAR) traffic data. The rolling averages for the economically intuitive sectors are now in contraction, and the decline in the last four weeks negatively affected all the averages.

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 contracted 6.7 %. We primarily use rolling averages the analyze the data due to weekly volatility.

Intermodal transport modestly expanded year-over-year this week.

The following graph compares the four week moving averages for the rail economically intuitive sectors (red line) vs. total movements (blue line):

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 -4.2 % decelerating decelerating 13 week rolling average +1.0 % decelerating decelerating 52 week rolling average +3.2 % decelerating decelerating

A summary of the data from the AAR:

For this week, total U.S. weekly rail traffic was 508,239 carloads and intermodal units, down 2.9 percent compared with the same week last year.

Total carloads for the week ending January 20 were 241,258 carloads, down 7.6 percent compared with the same week in 2017, while U.S. weekly intermodal volume was 266,981 containers and trailers, up 1.8 percent compared to 2017.

Two of the 10 carload commodity groups posted an increase compared with the same week in 2017. They were forest products, up 478 carloads, to 10,217; and petroleum and petroleum products, up 338 carloads, to 10,554. Commodity groups that posted decreases compared with the same week in 2017 included coal, down 8,153 carloads, to 82,683; nonmetallic minerals, down 3,923 carloads, to 26,377; and motor vehicles and parts, down 2,750 carloads, to 14,560.

For the first three weeks of 2018, U.S. railroads reported cumulative volume of 691,255 carloads, down 5.7 percent from the same point last year; and 744,783 intermodal units, up 1.2 percent from last year. Total combined U.S. traffic for the first three weeks of 2018 was 1,436,038 carloads and intermodal units, a decrease of 2.2 percent compared to last year.