Rail Week Ending Saturday, Feb. 16: Economically Intuitive Sectors In Contraction

Week 7 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 are now in contraction.

Analyst Opinion of the Rail Data

This rail softness (and the suddenness and depth of its occurrance) is a little surprising.

We review this data set to understand the economy. The intuitive sectors (total carloads removing coal, grain and petroleum) contracted 3.2 % 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 declined from -2.0 % to -4.8 %.

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

Intermodal transport (containers or trailers on rail cars) growth has been relatively strong over the 12 months - but in 2019 this portion of rail transport is weak.

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 -4.0 % decelerating decelerating
13 week rolling average +1.0 % decelerating decelerating
52 week rolling average +2.4 % decelerating decelerating

A summary for this week from the AAR:

For this week, total U.S. weekly rail traffic was 523,915 carloads and intermodal units, down 3 percent compared with the same week last year.

Total carloads for the week ending February 16 were 250,236 carloads, down 3.9 percent compared with the same week in 2018, while U.S. weekly intermodal volume was 273,679 containers and trailers, down 2.1 percent compared to 2018.

Three of the 10 carload commodity groups posted an increase compared with the same week in 2018. They were petroleum and petroleum products, up 1,794 carloads, to 11,887; miscellaneous carloads, up 509 carloads, to 9,528; and forest products, up 26 carloads, to 9,981. Commodity groups that posted decreases compared with the same week in 2018 included coal, down 7,853 carloads, to 80,105; nonmetallic minerals, down 2,038 carloads, to 32,012; and chemicals, down 793 carloads, to 32,321.

For the first seven weeks of 2019, U.S. railroads reported cumulative volume of 1,730,989 carloads, up 0.1 percent from the same point last year; and 1,867,360 intermodal units, up 0.5 percent from last year. Total combined U.S. traffic for the first seven weeks of 2019 was 3,598,349 carloads and intermodal units, an increase of 0.3 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.