AAR: Trade Disputes, Economic Uncertainty Main Culprits for “Challenging” 2019

It’s no secret that U.S. rail traffic had a rough go in 2019—numbers were down pretty much across the board. And while the Association of American Railroads (AAR) blames a number of offenders, it’s hopeful that 2020 can bring some much-needed certainty to the industry.

“No question, 2019 was a challenging year for rail traffic, thanks mainly to the macroeconomy and continued years-long changes in energy markets,” said AAR Senior Vice President John T. Gray. “Trade disputes and the general economic uncertainty they spawned harmed rail-served industries much more than the overall economy. With recent progress on USMCA and in the China trade talks, railroads are hopeful that these lingering issues will be resolved in 2020 and create the certainty rail customers need to invest.”

Year-to-Date
Total U.S. carload traffic for the first 12 months of 2019 was 12,972,404 carloads, down 4.9%, or 668,075 carloads, from the same period last year; and 13,732,570 intermodal units, down 5.1%, or 740,240 containers and trailers, from last year.

Total combined U.S. traffic for the first 52 weeks of 2019 was 26,704,974 carloads and intermodal units, a decrease of 5% compared to last year.

December 2019
U.S. railroads originated 928,102 carloads in Dec. 2019, down 9.2%, or 93,788 carloads, from Dec. 2018. U.S. railroads also originated 990,934 containers and trailers in Dec. 2019, down 9.6%, or 105,239 units, from the same month last year. Combined U.S. carload and intermodal originations in Dec. 2019 were 1,919,036, down 9.4%, or 199,027 carloads and intermodal units from Dec. 2018.

In Dec. 2019, six of the 20 carload commodity categories tracked by the AAR each month saw carload gains compared with Dec. 2018. These included commodities such as: all other carloads, up 1,510 carloads or 6.7%; petroleum & petroleum products, up 814 carloads or 1.6%; and primary forest products, up 631 carloads or 16.5%. Commodities that saw declines in Dec. 2019 from Dec. 2018 included commodities such as: coal, down 64,932 carloads or 19%; grain, down 6,846 carloads or 7.8%; and crushed stone, sand & gravel, down 6,395 carloads or 8.4%.

Excluding coal, carloads were down 28,856 carloads, or 4.2%, in Dec. 2019 from a year prior. Excluding coal and grain, carloads were down 22,010 carloads, or 3.7%.

“Coal was by far the biggest source of U.S. rail carload decline in 2019, falling 9.2%—more than 405,000 carloads—from 2018,” said Gray. “In fact, coal carloads in 2019 were their lowest in decades and were 45% lower than their 2006 peak. Excluding coal, carloads in 2019 were down 2.8%. Despite intermodal declines compared to 2018, 2019 was the second highest year for U.S. rail intermodal in history. Once trade disputes are settled and operational changes aimed at improving network efficiency are fully implemented, railroads anticipate intermodal growth will return and stand ready to meet the demands of rail customers and the U.S. economy.”

Week Ended Dec. 28, 2019
None of the 10 carload commodity groups posted an increase compared with the same week in 2018. Commodity groups that posted decreases compared with the same week in 2018 included commodities such as coal, down 8,018 carloads, to 60,454; grain, down 2,960 carloads, to 15,524; and nonmetallic minerals, down 2,107 carloads, to 19,035.

Total U.S. weekly rail traffic was 373,728 carloads and intermodal units, down 9.2% compared with the same week last year. Total carloads for the week ended Dec. 28 were 191,590 carloads, down 8.9% compared with the same week in 2018, while U.S. weekly intermodal volume was 182,138 containers and trailers, down 9.5 percent compared to 2018.

North American rail volume for the week ended Dec. 28, 2019, on 12 reporting U.S., Canadian and Mexican railroads totaled 275,879 carloads, down 7% compared with the same week last year, and 247,216 intermodal units, down 7.6% compared with last year. Total combined weekly rail traffic in North America was 523,095 carloads and intermodal units, down 7.3%. North American rail volume for the 52 weeks of 2019 was 36,486,394 carloads and intermodal units, down 4% compared with 2018.

Canadian railroads reported 70,850 carloads for the week, down 1%, and 52,790 intermodal units, down 0.9% compared with the same week in 2018. For all of 2019, Canadian railroads reported cumulative rail traffic volume of 7,829,717 carloads, containers and trailers, down 0.4%.

Mexican railroads reported 13,439 carloads for the week, down 9.4% compared with the same week last year, and 12,288 intermodal units, down 4.6%. Cumulative volume on Mexican railroads for all of 2019 was 1,951,703 carloads and intermodal containers and trailers, down 2.9% from the same point last year.