U.S. rail carload and intermodal volumes are down annually at halfway point of 2019, says AAR

Through the first six months of 2019, U.S. rail carloads––at 6,552,218––were down 2.9%, or 195,168 carloads, compared to the first six months of 2018, and intermodal units for the same period––at 6,924,261––fell 3.2%, or 229,247 units.

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United States rail carload and intermodal volumes saw annual declines in June, as well as the first six months of 2019, according to data issued by the.

Rail carloads––at 1,023,394––saw a 5.3%, or 57,173-carload decline, compared to June 2018. AAR reported that four of the 20 carload commodity categories it tracks saw annual gains, including: petroleum & petroleum products, up 8,122 carloads or 18.1%; nonmetallic minerals, up 774 carloads or 5.1%; and chemicals, up 613 carloads or 0.5%. Commodities with annual declines included: coal, down 30,144 carloads or 9.0%; crushed stone, sand & gravel, down 10,764 carloads or 9.9%; and grain, down 6,715 carloads or 7.1%.

When removing coal from the total carload tally, AAR said that total June carloads were down 3.6%, or 27,029 carloads, and minus coal and grain, June carloads were down 3.1%, or 23,014 carloads.

Intermodal containers and trailers––at 1,075,974––decreased 7.2%, or 84,002 units, compared to June 2018.
“June marked the fifth straight monthly decline for total U.S. rail carloads and for U.S. intermodal traffic,” said AAR Senior Vice President . “Manufacturing is responsible for much of the rail traffic base, but U.S. manufacturing output has been falling for several months. Housing too is in the doldrums, and trade is suffering because of tensions with trading partners overseas. Taken together, demand for rail service just isn’t as strong as it was six months or a year ago. Obviously, railroads hope things turn around, both for their own sake and for the sake of the broader economy.”

Through the first six months of 2019, U.S. rail carloads––at 6,552,218––were down 2.9%, or 195,168 carloads, compared to the first six months of 2018, and intermodal units for the same period––at 6,924,261––fell 3.2%, or 229,247 units.

In its monthly , AAR reported that total second quarter U.S. carloads were down 2.7% in the second quarter, which marked an improvement compared to the first quarter’s 3.1% annual decline. As for intermodal, RTI noted that while June 2018 represented the best year every for intermodal volumes, 2019 is not keeping pace, with June marking the fifth consecutive month of annual declines, as well as the largest percentage decline going back to April 2016. Total U.S. intermodal volumes were down 5.7% in the second quarter. But even with the year-to-date declines, AAR reported that, at the moment, 2019 is on track to be the second highest intermodal volume year ever, second only to 2018.

In a recent interview, the AAR’s Gray said that it is likely there will be substantial growth in intermodal going forward.

“But it is like everything else in the economy, like the stock market, there are some troubling things, too,” he said. “That is reflective of the uncertainty in the economy right now. A lot of that is due to trade, and other parts of it are due to people being concerned about how long the growth in the economy has been going on and if we are waiting or a correction there. Nobody really knows at this point. The uncertainty within the economy is kind of creating hesitation for things like goods production. If you look at the total economy…what you will hear is GDP coming in at 3.1% for 2018. That is great for the over all economy, but when you look at the underlying components, things like the goods portion of the economy and the amount of the economy that is really related to the things we can handle, it appears that the growth on that has been more in the 1%-to-1.5% range. The goods portion of things is what we focus on, rather than the total economy. We have looked at the statistical relationship between the total economy and rail traffic and you can get about as good a relationship between the two random numbers as you can. And when you look at the relationship of the goods portion of the economy, you then get a very different picture. It is tightly related.”

For the week ending June 29––U.S. rail carloads at 261,415––were down 3.5% compared to the same week a year ago, and intermodal units––at 271,749––fell 7.4%.

About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

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