Rail Week Ending Saturday, June 29: Down 6.3% In June 2019

Week 26 of 2019 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 rolling averages remain in contraction - but marginally improved.

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 1,023,394 carloads in June 2019, down 5.3 percent, or 57,173 carloads, from June 2018. U.S. railroads also originated 1,075,974 containers and trailers in June 2019, down 7.2 percent, or 84,002 units, from the same month last year. Combined U.S. carload and intermodal originations in June 2019 were 2,099,368, down 6.3 percent, or 141,175 carloads and intermodal units from June 2018.

In June 2019, four of the 20 carload commodity categories tracked by the AAR each month saw carload gains compared with June 2018. These included: petroleum & petroleum products, up 8,122 carloads or 18.1 percent; nonmetallic minerals, up 774 carloads or 5.1 percent; and chemicals, up 613 carloads or 0.5 percent. Commodities that saw declines in June 2019 from June 2018 included: coal, down 30,144 carloads or 9.0 percent; crushed stone, sand & gravel, down 10,764 carloads or 9.9 percent; and grain, down 6,715 carloads or 7.1 percent.

"June marked the fifth straight monthly decline for total U.S. rail carloads and for U.S. intermodal traffic," said AAR Senior Vice President John T. Gray. "Manufacturing is responsible for much of the rail traffic base, but U.S. manufacturing output has been falling for several months. Housing too is in the doldrums, and trade is suffering because of tensions with trading partners overseas. Taken together, demand for rail service just isn't as strong as it was six months or a year ago. Obviously, railroads hope things turn around, both for their own sake and for the sake of the broader economy."

Excluding coal, carloads were down 27,029 carloads, or 3.6 percent, in June 2019 from June 2018. Excluding coal and grain, carloads were down 20,314 carloads, or 3.1 percent.

Total U.S. carload traffic for the first six months of 2019 was 6,552,218 carloads, down 2.9 percent, or 195,168 carloads, from the same period last year; and 6,924,261 intermodal units, down 3.2 percent, or 229,247 containers and trailers, from last year.

Total combined U.S. traffic for the first 26 weeks of 2019 was 13,476,479 carloads and intermodal units, a decrease of 3.1 percent compared to last year.

Week Ending June 29, 2019

Total U.S. weekly rail traffic was 533,164 carloads and intermodal units, down 5.5 percent compared with the same week last year.

Total carloads for the week ending June 29 were 261,415 carloads, down 3.5 percent compared with the same week in 2018, while U.S. weekly intermodal volume was 271,749 containers and trailers, down 7.4 percent compared to 2018.

Two of the 10 carload commodity groups posted an increase compared with the same week in 2018. They were motor vehicles and parts, up 1,810 carloads, to 18,366; and petroleum and petroleum products, up 1,593 carloads, to 12,935. Commodity groups that posted decreases compared with the same week in 2018 included coal, down 4,424 carloads, to 78,645; grain, down 2,555 carloads, to 20,955; and metallic ores and metals, down 2,204 carloads, to 23,919.

The middle row in the table below removes coal, grain, and petroleum from the changes in the railcar counts as these commodities are not economically intuitive.

[click on the graph below to enlarge]