Thursday, October 12, 2017

Double-digits for intermodal traffic

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The Association of American Railroads said total U.S. rail traffic for the week ending October 7 was 554,826 carloads and intermodal units, up 6.3% compared with the same week in 2016. Traffic included 269,336 carloads, up 2%, while intermodal volume was 285,490 containers and trailers, up 10.8%.

Seven of the 10 carload commodity groups posted an increase compared with the same week in 2016. They included nonmetallic minerals, 14.3%; chemicals, 10.7%, and metallic ores and metals, 8.6%.

Commodity groups that posted decreases compared with the same week in 2016 were coal, 3.0%; grain, 7.9%, and motor vehicles and parts, 9.2%.

For the first 40 weeks of 2017, U.S. railroads reported cumulative volume of 10,375,996 carloads, up 3.7% on-year, and 10,718,042 intermodal units, up 3.6%. Total combined traffic was 21,094,038 carloads and intermodal units, an increase of 3.7%.

North American weekly rail volume on 13 reporting U.S., Canadian and Mexican railroads totaled 367,435 carloads, up 2.1%, and 371,039 intermodal units, up 11.6% from the same period in 2016. Total combined weekly traffic was 738,474 carloads and intermodal units, up 6.7%. Volume for the first 40 weeks of 2017 was 27,979,390 carloads and intermodal units, up 5.1%.

Canadian railroads reported 82,819 carloads for the week, up 2.7%, and 71,937 intermodal units, up 16.5% on-year. For the first 40 weeks of 2017, cumulative volume of 5,794,428 carloads, containers and trailers was up 11.3%.

Mexican railroads reported 15,280 carloads for the week, up 0.9% compared with the same week a year ago, and 13,612 intermodal units, up 3.2%. Cumulative volume for the first 40 weeks of this year was 1,090,924 carloads and intermodal containers and trailers, up 0.6%.

Comments railroad economist and Railway Age contributor Jim Blaze:

“In the midst of intermodal peak season, intermodal rail traffic hit double digits growth. This sounds great, but upon further review, what might be the strategic reality? Isolating on just the U.S., the intermodal units on a long-term trend line are up, but only by 3.6%, not double-digits. That’s the 40-week cumulative change pattern. These weekly numbers are important , but be careful, because sudden short changes  likely are more a data noise syndrome rather than a new, long-term projectable outlook. Are there economic signs of a breakout rail intermodal growth? That probably would require a sustained long period of growth at about two to three times the rate of GDP growth. That is not occurring.

“However, in Canada, the 40-week pattern appears to indeed be a double-digit rate of intermodal rail growth. That pattern is lead largely by the Prince Rupert service route operated by CN for the Asia container trade. Canadian Pacific doesn’t serve Prince Rupert. This pattern should remind us that broad geographic numbers may be interesting, but the difficulty is in examining which strategic lanes are growing, and which are not. Weekly numbers don’t address these details. To the south, Mexican intermodal appeared to grow less than 2%.
“The combined traffic increase of 3.7% is strategically healthy in one respect. The just-under 4% rate exceeds the overall GDP growth rate for the U.S.” 

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