AAR: Rail Volumes ‘Decelerate’ in July

Written by Marybeth Luczak, Executive Editor
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While U.S. rail traffic in July 2021 was up from July 2020, the percentage increase was “significantly lower” than in other recent months, AAR Senior Vice President John T. Gray reported on Aug. 4.

Gray said this was due to “more difficult comparisons and because various external factors have led to a recent deceleration in rail volumes.” He provided examples:
• “Grain exports are down sharply, taking rail carloads of grain down with them.
• “Automakers are still hampered by semiconductor shortages, leading to sharply lower rail auto volumes.
• “Worldwide supply chain slowdowns are impacting both rail customers and railroads themselves.”

“While all of these should be manageable, temporary setbacks, their convergence has resulted in weaker rail volumes than basic domestic economic factors might otherwise imply,” Gray explained in the Association of American Railroads’ (AAR) traffic report for July and the week ending July 31. 

In July, U.S. Class I railroads originated 904,670 carloads, rising 6.6%, or 55,969 carloads, from July 2020, and they originated 1,066,169 containers and trailers, increasing 1.5%, or 15,450 units. Combined, last month’s originations came in at 1,970,839, up 3.8%, or 71,419 carloads and intermodal units from July 2020.

(For June 2021’s results, see “Rail Traffic Gains Build in 2Q21.” For May 2021’s results, see “AAR: May 2021 Traffic Results ‘Encouraging.’”)

Of the 20 carload commodity categories AAR tracks each month, 10 saw carload gains in July 2021 compared with the prior-year period. These included: coal, up 31,619 carloads or 14.1%; metallic ores, up 14,151 carloads or 137.8%; and primary metal products, up 9,802 carloads or 36.4%. Commodities that saw declines in July 2021 from July 2020 included: motor vehicles and parts, down 12,309 carloads or 21.3%; grain, down 6,112 carloads or 7.3%; and grain mill products, down 1,862 carloads or 5%.

Excluding coal, carloads were up 24,350 carloads, or 3.9%, in July 2021 vs. the same month last year. Excluding coal and grain, carloads were up 30,462 carloads, or 5.6%.

Total U.S. carload traffic for the first seven months of 2021 was 6,907,195 carloads, increasing 9.1%, or 573,549 carloads, from the same point last year; and 8,398,236 intermodal units, gaining 15.2%, or 1,109,282 containers and trailers, from 2020.

Total combined U.S. traffic for the first 30 weeks of the year was 15,305,431 carloads and intermodal units, a 12.4% boost from 2020.

Week 30 (Ending July 31, 2021)

Total U.S. weekly rail traffic was 502,540 carloads and intermodal units, a 3% rise over the prior-year period.

Total carloads for the week ending July 31 came in at 228,975, up 5.2% from the same week in 2020, while U.S. weekly intermodal volume was 273,565 containers and trailers, up 1.2% vs. last year.

But rail volumes for week 30 were down 7% compared with the same week in 2019, according to Susquehanna Financial Group (SFG) Analyst Bascome Majors. He also found that the four-week trend was up 4% vs. 2020 and down 7% from 2019. According to Majors’ analysis, intermodal for the week ending July 31, 2021 was down 1% from 2019, and the four-week trend for intermodal was down 2% vs. 2019.

AAR reported that seven of the 10 carload commodity groups posted an increase vs. the same point in 2020. They included metallic ores and metals, up 8,183 carloads, to 24,684; coal, up 3,576 carloads, to 62,965; and nonmetallic minerals, up 2,792 carloads, to 32,356. Commodity groups that posted declines compared with 2020 were motor vehicles and parts, down 3,638 carloads, to 12,372; grain, down 2,934 carloads, to 18,231; and farm products excluding grain, and food, down 660 carloads, to 14,928.

North American rail volume for the week ending July 31, 2021, on 12 reporting U.S., Canadian and Mexican railroads totaled 324,794 carloads, rising 5.8% from the same week last year, and 359,421 intermodal units, increasing 1.9%. Total combined weekly rail traffic in North America was 684,215 carloads and intermodal units, a 3.7% boost. North American rail volume for the first 30 weeks of 2021 was 20,864,770 carloads and intermodal units, a gain of 10.9% compared with the prior-year period.

Canadian railroads reported 75,316 carloads for the week, gaining 4.1%, and 69,949 intermodal units, increasing 2.9% compared with the same week in 2020. For the first 30 weeks of 2021, they reported cumulative rail traffic volume of 4,463,379 carloads, containers and trailers, rising 7.3%.

Mexican railroads reported 20,503 carloads for the week ending July 31, 2021, up 20.3% vs. the same week last year, and 15,907 intermodal units, up 9.9%. Their cumulative volume for the first 30 weeks of 2021 was 1,095,960 carloads and intermodal containers and trailers, up 6.7% vs. last year.

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