Week 44 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. Although the economically intuitive sectors improved this week - the rolling averages declined.

Analyst Opinion of the Rail Data

Rail improved this week but the overall rate of growth in 2018 has slowly decelerating.

We review this data set to understand the economy. If coal, grain, and petroleum are removed from the analysis for carloads, this week it expanded 1.4 %. We primarily use rolling averages the analyze the data due to weekly volatility - and the 4 week rolling average for the intuitive sectors was declined from 0.0 % to -0.1 %.

Intermodal transport (containers or trailers on rail cars) growth improved this week it grew 8.9 % YoY.

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).

A summary for this week from the AAR:

U.S. railroads originated 1,338,037 carloads in October 2018, up 1 percent, or 12,598 carloads, from October 2017. U.S. railroads also originated 1,443,914 containers and trailers in October 2018, up 4.2 percent, or 58,546 units, from the same month last year. Combined U.S. carload and intermodal originations in October 2018 were 2,781,951, up 2.6 percent, or 71,144 carloads and intermodal units from October 2017.

In October 2018, 13 of the 20 carload commodity categories tracked by the AAR each month saw carload gains compared with October 2017. These included: petroleum & petroleum products, up 13,746 carloads or 28.4 percent; coal, up 6,828 carloads or 1.6 percent; and primary metal products, up 4,188 carloads or 9.8 percent. Commodities that saw declines in October 2018 from October 2017 included: crushed stone, sand & gravel, down 12,745 carloads or 9.6 percent; grain, down 5,620 carloads or 4.8 percent; and coke, down 2,067 carloads or 9.9 percent.

"U.S. rail traffic in October was mixed. On the negative side, changing market conditions for frac sand caused lower rail carloads of crushed stone, sand, and gravel, while uncertainties in export markets helped keep grain carloads down," said AAR Senior Vice President John T. Gray. "On the plus side, coal carloads in October rose for the first time in five months and intermodal enjoyed its second-best month ever. All in all, we expect most rail traffic categories to continue to benefit from what we hope will be continued solid economic growth."

Excluding coal, carloads were up 5,770 carloads, or 0.6 percent, in October 2018 from October 2017. Excluding coal and grain, carloads were up 11,390 carloads, or 1.5 percent.

Total U.S. carload traffic for the first 10 months of 2018 was 11,586,596 carloads, up 1.9 percent, or 212,136 carloads, from the same period last year; and 12,275,918 intermodal units, up 5.8 percent, or 671,960 containers and trailers, from last year.

Total combined U.S. traffic for the first 44 weeks of 2018 was 23,862,514 carloads and intermodal units, an increase of 3.8 percent compared to last year.

Week Ending November 3, 2018

Total U.S. weekly rail traffic was 560,046 carloads and intermodal units, up 5.4 percent compared with the same week last year.

Total carloads for the week ending November 3 were 270,305 carloads, up 1.8 percent compared with the same week in 2017, while U.S. weekly intermodal volume was 289,741 containers and trailers, up 8.9 percent compared to 2017.

Seven of the 10 carload commodity groups posted an increase compared with the same week in 2017. They included petroleum and petroleum products, up 3,005 carloads, to 12,668; miscellaneous carloads, up 2,273 carloads, to 11,613; and metallic ores and metals, up 1,485 carloads, to 24,191. Commodity groups that posted decreases compared with the same week in 2017 were grain, down 2,904 carloads, to 20,441; nonmetallic minerals, down 1,062 carloads, to 36,613; and motor vehicles and parts, down 837 carloads, to 16,681.

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

[click on graph below to enlarge]