Week 9 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.

Analyst Opinion of the Rail Data

We review this data set to understand the economy. The intuitive sectors (total carloads removing coal, grain and petroleum) contracted 4.8 % 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 -3.2 % to -2.9 %.

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 (containers or trailers on rail cars) growth has been relatively strong over the 12 months - but in 2019 this portion of rail transport has weakened and the year-to-date growth is now in contraction.

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 999,978 carloads in February 2019, down 2.7 percent, or 28,238 carloads, from February 2018. U.S. railroads also originated 1,094,499 containers and trailers in February 2019, down 0.9 percent, or 9,513 units, from the same month last year. Combined U.S. carload and intermodal originations in February 2019 were 2,094,477, down 1.8 percent, or 37,751 carloads and intermodal units from February 2018.

In February 2019, eight of the 20 carload commodity categories tracked by the AAR each month saw carload gains compared with February 2018. These included: petroleum & petroleum products, up 8,269 carloads or 20.5 percent; primary metal products, up 1,378 carloads or 3.7 percent; and pulp & paper products, up 1,165 carloads or 5.5 percent. Commodities that saw declines in February 2019 from February 2018 included: coal, down 22,945 carloads or 6.7 percent; crushed stone, sand & gravel, down 6,190 carloads or 6.9 percent; and grain mill products, down 2,262 carloads or 5.9 percent.

"It's impossible to know how much of the sluggishness in rail volumes in February was due to weather and how much was due to weakness in the overall economy, but it seems likely that weather played a role," said AAR Senior Vice President of Policy and Economics John T. Gray. "Every winter causes problems for railroads, but this past February on average was noticeably colder than last year in much of the country and that may have been enough to pull rail volumes below last year. That said, trade-related uncertainty hasn't helped, nor has the economic uncertainty engendered by perceived softness in parts of the economy."

Excluding coal, carloads were down 5,293 carloads, or 0.8 percent, in February 2019 from February 2018. Excluding coal and grain, carloads were down 5,458 carloads, or 0.9 percent.

Total U.S. carload traffic for the first two months of 2019 was 2,238,465 carloads, down 0.3 percent, or -7,184 carloads, from the same period last year; and 2,410,667 intermodal units, down 0.1 percent, or -3,505 containers and trailers, from last year.

Total combined U.S. traffic for the first nine weeks of 2019 was 4,649,132 carloads and intermodal units, a decrease of 0.2 percent compared to last year.

Week Ending March 2, 2019

Total U.S. weekly rail traffic was 528,153 carloads and intermodal units, down 3 percent compared with the same week last year.

Total carloads for the week ending March 2 were 250,522 carloads, down 5.5 percent compared with the same week in 2018, while U.S. weekly intermodal volume was 277,631 containers and trailers, down 0.7 percent compared to 2018.

Two of the 10 carload commodity groups posted an increase compared with the same week in 2018. They were petroleum and petroleum products, up 1,920 carloads, to 11,882; and motor vehicles and parts, up 53 carloads, to 18,423. Commodity groups that posted decreases compared with the same week in 2018 included coal, down 7,130 carloads, to 78,596; grain, down 2,961 carloads, to 20,314; and nonmetallic minerals, down 2,750 carloads, to 31,934.

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 graph below to enlarge]