Rail Week Ending January 2018: Slow Start To The New Year

Week 1 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 economically intuitive sectors remain in expansion, but the decline in the last two 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 declined 3.9 % (meaning that the predictive economic elements worsened year-over-year). The decline for the second week likely was due to a holiday mismatch between 2017 and 2018 – and that is why we primarily use rolling averages.

Intermodal transport declined again 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): 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 +1.6 % decelerating decelerating 13 week rolling average +1.9 % decelerating decelerating 52 week rolling average +3.5 % decelerating accelerating

A summary of the data from the AAR:

For this week, total U.S. weekly rail traffic was 415,862 carloads and intermodal units, down 4.6 percent compared with the same week last year.

Total carloads for the week ending January 6 were 208,646 carloads, down 5.2 percent compared with the same week in 2017, while U.S. weekly intermodal volume was 207,216 containers and trailers, down 3.9 percent compared to 2017. Total combined U.S. traffic for the first week of 2018 was 415,862 carloads and intermodal units, a decrease of 4.6 percent compared to last year.?

One of the 10 carload commodity groups posted an increase compared with the same week in 2017. It was petroleum and petroleum products, up 741 carloads, to 9,640. Commodity groups that posted decreases compared with the same week in 2017 included coal, down 4,554 carloads, to 69,973; nonmetallic minerals, down 2,159 carloads, to 21,872; and grain, down 1,924 carloads, to 19,638.