Week 26 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.

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 7.2 %. We primarily use rolling averages the analyze the data due to weekly volatility - and the 4 week rolling average for the intuitive sectors improved from 3.8 % to 4.8 %.

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 (and is better than GDP growth) - it has yet to confirm 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).

A summary of the data from the AAR:

Total carloads for the week ending July 7 were 240,514 carloads, up 5.4 percent compared with the same week in 2017, while U.S. weekly intermodal volume was 244,679 containers and trailers, up 12 percent compared to 2017.

Nine of the 10 carload commodity groups posted an increase compared with the same week in 2017. They included grain, up 3,207 carloads, to 21,299; nonmetallic minerals, up 2,341 carloads, to 35,270; and petroleum and petroleum products, up 1,808 carloads, to 10,257. One commodity group posted a decrease compared with the same week in 2017: coal, down 371 carloads, to 76,562.

For the first 27 weeks of 2018, U.S. railroads reported cumulative volume of 6,987,928 carloads, up 1.4 percent from the same point last year; and7,398,236 intermodal units, up 6.2 percent from last year. Total combined U.S. traffic for the first 27 weeks of 2018 was 14,386,164 carloads and intermodal units, an increase of 3.8 percent compared to last year.

The middle row in the table below removes coal and grain from the changes in the railcar counts as neither of these commodities is economically intuitive.

(Click on image to enlarge)

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For the week ended July 7, 2018

• Estimated U.S. coal production totaled approximately 13 million short tons (mmst)
• This production estimate is 11.1% lower than last week's estimate and 4.1% higher than the production estimate in the comparable week in 2017
• East of the Mississippi River coal production totaled 5.1 mmst
• West of the Mississippi River coal production totaled 7.9 mmst
• U.S. year-to-date coal production totaled 384 mmst, 3.2% lower than the comparable year-to-date coal production in 2017