Rail Week Ending March 2018: Growth Remains Mixed

Week 10 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 expanded 0.6 %. 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):

Although rail’s growth rate is improving – it has yet to show that the economy is getting ready for a growth spurt. 

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 +2.9 % accelerating accelerating 13 week rolling average +1.3 % decelerating unchanged 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 534,282 carloads and intermodal units, up 6.2 percent compared with the same week last year.

Total carloads for the week ending March 10 were 256,075 carloads, up 1.6 percent compared with the same week in 2017, while U.S. weekly intermodal volume was 278,207 containers and trailers, up 10.8 percent compared to 2017.

Six of the 10 carload commodity groups posted an increase compared with the same week in 2017. They included coal, up 4,134 carloads, to 83,696; chemicals, up 2,089 carloads, to 32,884; and farm products excl. grain, and food, up 829 carloads, to 16,882. Commodity groups that posted decreases compared with the same week in 2017 included motor vehicles and parts, down 1,573 carloads, to 16,818; grain, down 1,253 carloads, to 22,995; and miscellaneous carloads, down 951 carloads, to 8,876.

For the first 10 weeks of 2018, U.S. railroads reported cumulative volume of 2,501,621 carloads, down 1.6 percent from the same point last year; and 2,692,349 intermodal units, up 5.6 percent from last year. Total combined U.S. traffic for the first 10 weeks of 2018 was 5,193,970 carloads and intermodal units, an increase of 2 percent compared to last year.