AAR: “We May Have Seen the Worst of COVID-19’s Impacts on Asian Trade”Written by Andrew Corselli
The Association of American Railroads (AAR) released U.S. rail traffic for the week ended March 21, 2020, and it contained some much-needed good news: The worst of the coronavirus’ effects on Asian trade may be over.
“The good news is that the intermodal volumes of the railroads serving the West Coast ports that receive the bulk of imports from China appear to have plateaued over the past four weeks, indicating that we may have seen the worst of the COVID-19 impacts on the Asia trade,” said AAR Senior Vice President Policy and Economics John T. Gray.
“It wouldn’t be surprising to see rail volumes of other categories soften in the weeks ahead as steps taken to limit the spread of COVID-19 continue to impact producers, both here and abroad, particularly those of consumer goods or intermediate products from which those goods are produced,” Gray said.
Indeed. For the week ended March 21, total U.S. weekly rail traffic was 459,966 carloads and intermodal units, down 8.6% compared with the same week last year. Total carloads for this week were 224,048 carloads, down 5.4% compared with the same week in 2019, while U.S. weekly intermodal volume was 235,918 containers and trailers, down 11.4% compared to 2019.
Three of the 10 carload commodity groups posted an increase compared with the same week in 2019. They were chemicals, up 3,760 carloads, to 34,471; miscellaneous carloads, up 858 carloads, to 9,747; and farm products excl. grain, and food, up 507 carloads, to 15,984. Commodity groups that posted decreases compared with the same week in 2019 included commodities such as coal, down 9,223 carloads, to 56,093; nonmetallic minerals, down 4,774 carloads, to 30,674; and metallic ores and metals, down 1,427 carloads, to 18,576.
“Demand for rail service depends on the demand further down the chain for the products railroads haul and on the ability of firms they serve to produce what is demanded,” said Gray. “Autos are a good example. What with job uncertainty and either voluntary or enforced social distancing for many people, this isn’t a great time to visit new car showrooms, so demand for autos is down. Further, most automakers have suspended manufacturing operations for the time being. As a result of both these factors, rail carloads of autos and auto parts fell considerably this past week.”
For the first 12 weeks of 2020, U.S. railroads reported cumulative volume of 2,773,207 carloads, down 6.1% from the same point last year; and 2,948,362 intermodal units, down 8.1% from last year. Total combined U.S. traffic for the first 12 weeks of 2020 was 5,721,569 carloads and intermodal units, a decrease of 7.2% compared to last year.
North American rail volume for the week ended March 21, 2020, on 12 reporting U.S., Canadian and Mexican railroads totaled 327,787 carloads, down 3.8% compared with the same week last year, and 311,769 intermodal units, down 11.5% compared with last year. Total combined weekly rail traffic in North America was 639,556 carloads and intermodal units, down 7.7%. North American rail volume for the first 12 weeks of 2020 was 7,863,533 carloads and intermodal units, down 5.5% compared with 2019.
Canadian railroads reported 83,954 carloads for the week, up 1.4%, and 61,041 intermodal units, down 14.1% compared with the same week in 2019. For the first 12 weeks of 2020, Canadian railroads reported cumulative rail traffic volume of 1,698,008 carloads, containers and trailers, down 2%.
Mexican railroads reported 19,785 carloads for the week, down 5.9% compared with the same week last year, and 14,810 intermodal units, down 1.3%. Cumulative volume on Mexican railroads for the first 12 weeks of 2020 was 443,956 carloads and intermodal containers and trailers, up 3.5% from the same point last year.