Rail Week Ending February 24, 2018: A Marginally Worse Week

Week 8 of 2018 shows same week total rail traffic (from same week one year ago) improved according to the Association of American Railroads (AAR) traffic data. The rolling averages remain mixed.

Analyst Opinion of the Rail Data

We review this data set to understand the economy. If coal and grain are removed from the analysis for carloads, this week it contracted 2.0 %. We primarily use rolling averages the analyze the data due to weekly volatility.

Intermodal transport growth remains strong year-over-year.

The following graph compares the four-week moving averages for carload 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 +1.0 % decelerating decelerating 13 week rolling average +1.2 % accelerating decelerating 52 week rolling average +3.0 % accelerating unchanged

A summary of the data from the AAR:

For this week, total U.S. weekly rail traffic was 528,440 carloads and intermodal units, up 2.8 percent compared with the same week last year.

Total carloads for the week ending February 24 were 251,970 carloads, down 1.3 percent compared with the same week in 2017, while U.S. weekly intermodal volume was 276,470 containers and trailers, up 6.7 percent compared to 2017.

Four of the 10 carload commodity groups posted an increase compared with the same week in 2017. They included coal, up 781 carloads, to 85,600; petroleum and petroleum products, up 602 carloads, to 10,047; and farm products excl. grain, and food, up 103 carloads, to 16,494. Commodity groups that posted decreases compared with the same week in 2017 included grain, down 1,157 carloads, to 20,143; motor vehicles and parts, down 1,093 carloads, to 17,527; and nonmetallic minerals, down 1,044 carloads, to 31,511.

For the first eight weeks of 2018, U.S. railroads reported cumulative volume of 1,980,887 carloads, down 2.4 percent from the same point last year; and 2,134,607 intermodal units, up 4.3 percent from last year. Total combined U.S. traffic for the first eight weeks of 2018 was 4,115,494 carloads and intermodal units, an increase of 1 percent compared to last year.