Week 35 of 2020 shows same week total rail traffic (from same week one year ago) contracted 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 recovering from a 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. declined and remains deep in contraction. This week again intermodal was in expansion year-over-year and continues on a strengthening trendline.

However, carloads remain deep in contraction.

We review this data set to understand the economy. The intuitive sectors (total carloads removing coal, grain, and petroleum) contracted 11.2 % year-over-year for this week [9.8 % for the previous 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 -12.3 % to -11.8 %.

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] and intermodal combined).

A summary for this week from the AAR:

U.S. railroads originated 898,227 carloads in August 2020, down 14.9 percent, or 156,797 carloads, from August 2019. U.S. railroads also originated 1,122,954 containers and trailers in August 2020, up 3 percent, or 33,115 units, from the same month last year. Combined U.S. carload and intermodal originations in August 2020 were 2,021,181, down 5.8 percent, or 123,682 carloads and intermodal units from August 2019.

In August 2020, two of the 20 carload commodity categories tracked by the AAR each month saw carload gains compared with August 2019. These were grain, up 4,683 carloads or 5.6 percent; and farm products excl. grain, up 168 carloads or 5 percent. Commodities that saw declines in August 2020 from August 2019 were coal, down 85,216 carloads or 25.8 percent; crushed stone, sand & gravel, down 24,961 carloads or 25 percent; and petroleum & petroleum products, down 7,128 carloads or 14.3 percent.

"Despite the pandemic and the associated economic dislocations, an enormous amount of freight continues to move on railroads and other transportation modes," said AAR Senior Vice President John T. Gray. "For U.S. railroads, August 2020 was the best month in terms of intermodal loadings since October 2018 and the fifth best intermodal month ever. Much of what's inside the trailers and containers on an intermodal train ends up on the shelves of stores, or finds its way to consumers' doors via e-commerce merchants. Railroads help ensure that consumers get what they want, when they want it."

Excluding coal, carloads were down 71,581 carloads, or 9.9 percent, in August 2020 from August 2019. Excluding coal and grain, carloads were down 76,264 carloads, or 11.9 percent.

Total U.S. carload traffic for the first eight months of 2020 was 7,448,257 carloads, down 16 percent, or 1,423,522 carloads, from the same period last year; and 8,610,477 intermodal units, down 7.7 percent, or 717,985 containers and trailers, from last year.

Total combined U.S. traffic for the first 35 weeks of 2020 was 16,058,734 carloads and intermodal units, a decrease of 11.8 percent compared to last year.

Week Ending August 29, 2020

Total U.S. weekly rail traffic was 508,307 carloads and intermodal units, down 6.2 percent compared with the same week last year.

Total carloads for the week ending August 29 were 225,703 carloads, down 15.9 percent compared with the same week in 2019, while U.S. weekly intermodal volume was 282,604 containers and trailers, up 3.4 percent compared to 2019.

None of the 10 carload commodity groups posted an increase compared with the same week in 2019. Commodity groups that posted decreases compared with the same week in 2019 included coal, down 23,701 carloads, to 62,919; nonmetallic minerals, down 6,457 carloads, to 29,841; and metallic ores and metals, down 3,890 carloads, to 19,676.

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]