Week 46 of 2020 shows same week total rail traffic (from the same week one year ago) improved according to the Association of American Railroads (AAR) traffic data. Total rail traffic has been mostly in contraction for over one year - and now is slowly recovering from the coronavirus pandemic.

Analyst Opinion of the Rail Data

Total rail traffic has two components - carloads and intermodal (containers or trailers on rail cars). Container exports from China are now recovering, container exports from the U.S. remain deep in contraction. This week again intermodal continued in expansion year-over-year and continues on a strengthening trendline.

Carloads are no longer in contraction.

But overall because of the strength of intermodal, rail is on an improving trendline.

We review this data set to understand the economy. The intuitive sectors (total carloads removing coal, grain, and petroleum) contracted 2.6 % year-over-year for this week. We primarily use rolling averages to analyze the intuitive data due to weekly volatility - and the 4 week rolling year-over-year average for the intuitive sectors improved from -6.5 % to -5.5 %

When rail contracts, it suggests a slowing of the economy.

The following graph compares the four-week moving averages for carload economically intuitive sectors (red line) vs. total movements (blue line):

.Intermodal transport growth was weak and in contraction in 2019.

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 the 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] ).

A summary for this week from the AAR:

For this week, total U.S. weekly rail traffic was 527,462 carloads and intermodal units, up 5.2 percent compared with the same week last year.

Total carloads for the week ending November 14 were 232,146 carloads, down 3.1 percent compared with the same week in 2019, while U.S. weekly intermodal volume was 295,316 containers and trailers, up 12.9 percent compared to 2019.

Six of the 10 carload commodity groups posted an increase compared with the same week in 2019. They included grain, up 6,783 carloads, to 29,123; farm products excluding grain, and food, up 1,046 carloads, to 16,384; and metallic ores and metals, up 587 carloads, to 19,581. Commodity groups that posted decreases compared with the same week in 2019 included coal, down 12,148 carloads, to 60,414; petroleum and petroleum products, down 3,211 carloads, to 10,744; and nonmetallic minerals, down 1,125 carloads, to 29,067.

For the first 46 weeks of 2020, U.S. railroads reported cumulative volume of 9,941,003 carloads, down 14.1 percent from the same point last year; and 11,793,296 intermodal units, down 3.7 percent from last year. Total combined U.S. traffic for the first 46 weeks of 2020 was 21,734,299 carloads and intermodal units, a decrease of 8.8 percent compared to last year.

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]