The latest carload report is good news for Class I railroads, but does it indicate coming headwinds for the U.S. economy?
The Association of American Railroads said U.S. rail traffic for the week ending May 26 was 565,502 carloads and intermodal units, up 4.4% compared with the same week in 2017.
Commodities are closely watched indicators of the economy, which grew by 2.8% in April. Recent corporate earnings pointed to higher costs driven by more expensive goods, labor and fuel and, coming on a number of interest rake hikes for the Federal Reserve, and an overheated economy could presage an uptick in inflation.
Traffic totaled 273,226 carloads, up 3%, while U.S. intermodal volume was 292,276 containers and trailers, up 5.8% compared to 2017.
Eight of 10 carload commodity groups gained on the year-ago period led by petroleum at 8.7%. While the price of crude has been increasing, OPEC countries this week said they expect to increase production, which could reverse that trend.
Chemical shipments were 7.9% higher, as were metallic ore and minerals, 6.2%; grain, 4.2%, and coal, 2.5%. Motor vehicles was the lone weaker category, off 4.8%.
For the first 21 weeks of 2018, U.S. railroads reported cumulative volume of 5,414,483 carloads, up 1.2%, and 5,736,006 intermodal units, up 5.9%. Total combined traffic for the first 21 weeks was 11,150,489 carloads and intermodal units, an increase of 3.6% on 2017.
North American rail volume for the week on 12 reporting U.S., Canadian and Mexican railroads totaled 376,995 carloads, up 3.4%, and 376,449 intermodal units, up 5%. Total combined weekly rail traffic in North America was 753,444 carloads and intermodal units, up 4.2%. North American volume for the first 21 weeks of 2018 was 15,028,105 carloads and intermodal units, up 3.2%.
Canadian railroads reported 83,017 carloads for the week, up 9.3%, and 66,190 intermodal units, up 4.4%. For the first 21 weeks of 2018, cumulative volume of 3,081,648 carloads, containers and trailers was up 3.4%.
Mexican railroads reported 20,752 carloads for the week and 17,983 intermodal units. Cumulative volume on Mexican railroads for the first 21 weeks of 2018 was 795,968 carloads and intermodal containers and trailers.