Rail Week Ending Saturday, Dec. 8: Economically Intuitive Sectors Remain In Contraction

Week 49 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. The economically intuitive sectors were in contraction this week.

Analyst Opinion of the Rail Data

The overall rate of rail 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 contracted 0.4 %. We primarily use rolling averages the analyze the data due to weekly volatility - and the 4 week rolling average for the intuitive sectors was improved from -2.6 % to -2.4 %.

Intermodal transport (containers or trailers on rail cars) growth has been relatively strong and grew 5.7 % YoY but the rate of growth trend has been slowing.

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).

  Percent current rolling average is larger than the rolling average of one year ago Current quantities accelerating or decelerating Current rolling average accelerating or decelerating compared to the rolling average one year ago
4 week rolling average +0.2 % accelerating accelerating
13 week rolling average +1.3 % accelerating decelerating
52 week rolling average +2.3 % accelerating decelerating

A summary for this week from the AAR:

For this week, total U.S. weekly rail traffic was 570,225 carloads and intermodal units, up 3.1 percent compared with the same week last year.

Total carloads for the week ending December 8 were 267,000 carloads, up 0.3 percent compared with the same week in 2017, while U.S. weekly intermodal volume was 303,225 containers and trailers, up 5.7 percent compared to 2017.

Five of the 10 carload commodity groups posted an increase compared with the same week in 2017. They included petroleum and petroleum products, up 2,464 carloads, to 13,286; miscellaneous carloads, up 1,754 carloads, to 10,824; and metallic ores and metals, up 400 carloads, to 22,517. Commodity groups that posted decreases compared with the same week in 2017 included nonmetallic minerals, down 2,271 carloads, to 31,809; coal, down 1,114 carloads, to 88,543; and grain, down 638 carloads, to 23,082.

For the first 49 weeks of 2018, U.S. railroads reported cumulative volume of 12,885,663 carloads, up 1.7 percent from the same point last year; and 13,679,958 intermodal units, up 5.5 percent from last year. Total combined U.S. traffic for the first 49 weeks of 2018 was 26,565,621 carloads and intermodal units, an increase of 3.6 percent compared to last year.

1 2
View single page >> |

Disclaimer: No content is to be construed as investment advise and all content is provided for informational purposes only.The reader is solely responsible for determining whether any investment, ...

more
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.