Rail Week Ending 15 April 2017: Economically Intuitive Sectors’ Decline Continue

Week 15 of 2017 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 declined.

Analyst Opinion of the Rail Data

Note that this week included a holiday whilst the comparable week in 2016 did not. This makes this weeks analysis slightly flawed.

We review this data set to understand the economy. If coal and grain are removed from the analysis, rail over the last 6 months been declining around 5% – but this week declined 5.8 % (meaning that the predictive economic elements declined year-over-year). Also, consider rail movements are below 2015 levels – even though they are above 2016 levels.

The following graph compares the rail economically intuitive sectors vs. total movements:

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 +7.5 % accelerating accelerating 13 week rolling average +5.2 % accelerating accelerating 52 week rolling average -1.9 % accelerating accelerating

A summary of the data from the AAR:

For this week, total U.S. weekly rail traffic was 519,318 carloads and intermodal units, up 3.9 percent compared with the same week last year.

Total carloads for the week ending April 15 were 255,485 carloads, up 6.2 percent compared with the same week in 2016, while U.S. weekly intermodal volume was 263,833 containers and trailers, up 1.7 percent compared to 2016.

Three of the 10 carload commodity groups posted an increase compared with the same week in 2016. They were coal, up 29.7 percent to 81,942 carloads; nonmetallic minerals, up 6.2 percent to 37,865 carloads; and grain, up 3.8 percent to 21,566 carloads. Commodity groups that posted decreases compared with the same week in 2016 included petroleum and petroleum products, down 14.9 percent to 9,267 carloads; motor vehicles and parts, down 12.3 percent to 16,247 carloads; and metallic ores and metals, down 4.4 percent to 22,621 carloads.

The week ending April 15, 2017 included Good Friday, which is a holiday for many railroads and rail customers. The comparable week in 2016 did not include Good Friday.