Freight Traffic Fell in April, AAR Says

U.S. Rail traffic during April continued to decline, the Association of American Railroads said this week.

Traffic for the month was down 6.0 percent or 120,898 carloads and intermodal units compared to the same month in 2022.

During April, U.S. Class I railroads hauled 1,881,950 carloads a gain of 936,637 carloads or 1.8 percent when compared with April 2022.

However, the 945,313 containers and trailers that the carriers handled during the month was a loss of 12.7 percent compared with the same month in 2022.

Seven of the 20 carload commodity categories tracked by the AAR each month posted gains compared with April 2022.

These included: coal, up 10,098 carloads or 4.1 percent; crushed stone, sand and gravel, up 7,901 carloads or 9.7 percent; and motor vehicles and parts, up 6,483 carloads or 12.3 percent.

Losing ground were chemicals, down 4,677 carloads or 3.4 percent; grain, down 3,294 carloads or 3.7 percent; and nonmetallic minerals, down 2,263 carloads or 14.9 percent.

Excluding coal, carloads were up 6,883 carloads, or 1.0 percent. Excluding coal and grain, carloads were up 10,177 carloads, or 1.7 percent.

Total U.S. carload traffic for the first four months of 2023 was 3,930,129 carloads, up 0.6 percent, or 23,161 carloads, from the same period last year; and 3,968,876 intermodal units, down 10.9 percent, or 484,228 containers and trailers, from last year.

Total combined U.S. traffic for the first 17 weeks of 2023 has been 7,899,005 carloads and intermodal units, a decrease of 5.5 percent compared to last year.

In a statement, AAR Senior Vice President John T. Gray said intermodal volume continues to lag due to significantly lower trade activity at ports, weaker consumer demand, and continued excess retail inventories from the pandemic era.

 “These headwinds won’t last forever,” Gray said. “When they dissipate, railroads will be prepared to meet their customers’ needs safely and reliably.”

AAR Cancels Car Removal Advisory

The Association of American Railroads has cancelled an advisory about a particular rail car’s wheel sets after further investigation found the wheelsets were not faulty.

The wheelsets had been linked to a March 4 derailment of a Norfolk Southern train in Springfield, Ohio

AAR had issued the advisory about the use of steel coil cars built by National Steel Car and recommended that certain types of wheelsets be replaced.

The advisory had affected 675 new cars which the AAR recommended be removed from service until they were modified.

NS had said its own investigation of the derailment had determined that its cause was linked to loose wheels.

National Car, which had disputed the AAR advisory, said its review of the cars in question found all of the wheelsets had been installed properly.

The company presented its findings to the AAR, National Transportation Safety Board and the Federal Railroad Administration.

AAR Issues Advisory on Coil Car Wheel Defects

A railroad industry trade association has recommended that railroads remove from service coil cars similar to those involved in a March 5 derailment of a Norfolk Southern train in Springfield, Ohio.

The Association of American Railroads made the recommendation, which it said affects about 675 coil cars from service recently built by National Steel Car of Hamilton, Ontario.

At least two of the cars were involved in the Springfield derailment.

In its announcement, the AAR said a defect in the cars may have caused horizontal movement as the cars were in motion. Investigators found loose wheels on two of the cars in questions involved in the Ohio derailment.

According to the AAR, the defect may have caused horizontal movement as the car traveled down the line. The AAR recommendation advises railroads to replace the wheel sets before putting them back into service.

“This is an uncommon defect to see in a wheel set that demanded urgent action,” AAR said in a statement.

The cars covered by the advisory were built between August 2022 and March 2023.

Intermodal Has Worst January Since 2013

Intermodal traffic in January posted its worst performance since 2013 the Association of American Railroads reported.

AAR Senior Vice President John T. Gray attributed the decline to retailers cutting back on inventories in response to reduced consumer spending.

Total U.S. carload traffic was 923,696 carloads, up 2.2 percent, or 19,827 carloads compared with January 2022.

Intermodal volume was 919,928 intermodal units, down 8.1 percent, or 81,443 containers and trailers, from last year.

Total combined U.S. traffic for the first four weeks of 2023 was 1,843,624 carloads and intermodal units, a decrease of 3.2 percent compared to last year.

U.S. rail traffic for January was down 3.2 percent compared with January 2022.

Twelve of the 20 carload commodity categories tracked by the AAR posted gains compared with January 2022.

Gainers included crushed stone, sand and gravel, up 14,694 carloads or 22.6 percent; coal, up 11,953 carloads or 4.6 percent; and motor vehicles and parts, up 6,293 carloads or 13.4 percent.

Losing ground last month were chemicals, down 15,641 carloads or 11.4 percent; all other carloads, down 2,273 carloads or 10.3 percent; and lumber and wood products, down 1,939 carloads or 14.5 percent.

Excluding coal, carloads were up 7,874 carloads, or 1.2 percent, in January 2023 from January 2022.

Excluding coal and grain, carloads were up 5,518 carloads, or 1.0 percent.

“Rail traffic began 2023 much the same way we ended 2022—demonstrating reasons for both optimism and caution,” Gray said, citing January as the best month for carloads of crushed stone and sand on record, largely due to the growth in domestic natural gas production and the need for frac sand.

Automotive traffic has yet to reach pre-COVID-19 pandemic levels, but posted improvement compared with 2022.

AAR Takes STB Small Rate Dispute Rule to Court

The Association of American Railroads is challenging in court a recent U.S. Surface Transportation Board ruling on small rate cases.

The trade association asked the U.S. Court of Appeals for the District of Columbia to review the rule which requires all seven Class 1 railroads to agree to an arbitration process before it can become effective.

The STB recently turned down a request by four Class 1 carriers to stay implementation of the rule.

U.S. Freight Traffic Down in 2022

U.S. freight railroad carload and intermodal traffic both fell in 2022 the Association of American Railroads reported this week.

Carload traffic was down 0.3 percent while intermodal volume fell 4.9 percent. The comparisons are to calendar year 2021.

Carload traffic for the year was 11,976,283 carloads or 34,001 carloads in 2022. Intermodal volume was 13,452,480 intermodal units or 686,580 containers and trailers.

Total combined U.S. traffic for 2022 was 25,428,763 carloads and intermodal units, a decrease of 2.8 percent compared to 2021.

Single-digit declines occurred during December 2022 when compared with December 2021.

AAR figures showed railroads originated 842,171 carloads in December 2022, down 4.4 percent, or 38,476 carloads.

December 2022 intermodal traffic was 900,213 containers and trailers down 5.2 percent, or 49,107 units compared with the same month in 2021.

Combined U.S. carload and intermodal originations in December 2022 were 1,742,384, down 4.8 percent, or 87,583 carloads and intermodal units from December 2021.

In December 2022, four of the 20 carload commodity categories tracked by the AAR posted gains.

That included motor vehicles and parts, up 5,842 carloads or 12.9 percent; crushed stone, sand and gravel, up 2,034 carloads or 3 percent; and food products, up 721 carloads or 3.2 percent.

Losing ground in December were chemicals, down 16,067 carloads or 12.1 percent; coal, down 12,991 carloads or 5.2 percent; and grain, down 4,589 carloads or 5.2 percent.

“Rail markets are always evolving, and 2022 was no exception,” said AAR Senior Vice President John T. Gray in a statement.

Gray said coal volume grew solidly last year largely because higher natural gas prices made coal-fired electricity generation more competitive.

“However, those same higher natural gas prices, along with other market disruptors, hurt rail chemical volumes since natural gas is a key raw material for chemical manufacturing,” Gray said.

Grain carloads in 2022 were slightly higher than the annual average over the past decade, but they were down compared with 2021, which was the best year for grain carloads since 2008.

Although intermodal traffic in 2022 was the sixth best on record, the grain volume of 2021 was stronger.

November Rail Freight Traffic Another Mixed Bag

U.S. rail traffic in November presented another mixed bag with some commodities growing but others losing ground.

Figures released by the Association of American Railroad showed that Class I railroads handled 1,162,736 carloads in November 2022, down 0.9 percent, or 10,437 carloads, from the same month in 2021.

Intermodal traffic was 1,230,291 containers and trailers, down 5.4 percent, or 70,107 units, compared with November 2021.

The combined carload and intermodal originations of 2,393,027, was down 3.3 percent, or 80,544 carloads and intermodal units compared with the same month last year.

Eight eight of the 20 carload commodity categories tracked by the AAR posted gains.

These included crushed stone, sand and gravel, up 8,726 carloads or 9.2 percent; motor vehicles and parts, up 5,372 carloads or 8.3 percent; and all other carloads, up 2,579 carloads or 10 percent.

Losing ground were chemicals, down 17,608 carloads or 10.3 percent; grain, down 3,757 carloads or 3 percent; and pulp and paper products, down 1,993 carloads or 7.2 percent.

AAR Senior Vice President John T. Gray said some of the losses can be attributed to economic factors in the industries associated with those commodities.

“For example, relatively slow lumber carloads are consistent with the weak market for new home construction,” Gray said in a statement.

“Conversely, rail-hauled motor vehicles and vehicle parts volumes have been rising as automakers have increased output thanks to greater parts availability.”

He said another factor is that historically Thanksgiving week is one of the lowest-volume weeks of the year for rail traffic.

During November if coal is excluded, carloads fell by 12,153 carloads, or 1.4 percent. Excluding coal and grain, carloads were down by 8,396 carloads, or 1.2 percent.

Total U.S. carload traffic for the first 11 months of 2022 was 11,134,112 carloads, up 0 percent, or 4,475 carloads, from the same period last year.

Intermodal traffic has been 12,552,267 intermodal units, down 4.8 percent, or 637,473 containers and trailers, from the year-ago period.

Total combined U.S. traffic for the first 48 weeks of 2022 has been 23,686,379 carloads and intermodal units, a 2.6 percent decrease from 2021. 

U.S. Freight Traffic Up 0.5% in October

Rail freight traffic in October was up 0.5 percent the Association of American Railroads said on Wednesday.

U.S. railroads originated 952,074 carloads last month, the AAR said, which was 5,121 carloads more than they handled in October 2021.

The totals included 1,062,422 containers and trailers, which was a drop of 1.4 percent or 15,095 units, compared with October 2021.

The combined, carload and intermodal originations of 2,014,496 was down 0.5 percent, or 9,974 carloads and intermodal units, from last year.

AAR Senior Vice President John T. Gray said October is usually one of the highest-volume months of the year for rail carloads and has proven to be the best month thus far in 2022.

Gray said intermodal traffic remains subdued largely because of high inventories at many retailers, lower port volumes and still-scarce warehouse capacity for many rail intermodal customers.

During October seven of the 20 carload commodity categories tracked by AAR posted gains.

They included coal, up 14,937 carloads or 5.8 percent; crushed stone, sand and gravel, up 8,615 carloads or 10.7 percent; and motor vehicles and parts, up 5,998 carloads or 11.4 percent. Losing ground were chemicals, down 6,195 carloads or 4.8 percent; primary metal products, down 4,645 carloads or 13.2 percent; and all other carloads, down 4,209 carloads or 16.8 percent.

All comparisons are with October 2021.

Gray noted that grain traffic surged because producers chose rail as an alternative to the Mississippi River constraints. He said motor vehicles traffic had one of its better months since before the COVID-19 pandemic took hold in March 2020.

“Carloads of chemicals were down in part because of high natural gas feedstock prices,” Gray said in a statement.

Excluding coal, carloads were down 9,816, or 1.4 percent, in October compared with October 2021. Excluding coal and grain, carloads were down 8,950, or 1.5 percent.

AAR said rail freight volume in October was similar to the result of July and August when carloads were up and intermodal volume was down.

In September carloads and intermodal volume alike were down compared to the same month in 2021.

Thus far in 2022, U.S. carload traffic has been 9,971,376 carloads, up 0.1 percent, or 14,912 carloads, compared with the first 10 months of 2021.

Intermodal traffic has been 11,321,976 intermodal units, down 4.8 percent, or 567,366 containers and trailers.

Total combined freight traffic for the first 43 weeks of 2022 was 21,293,352 carloads and intermodal units, a 2.5 percent decline compared with last year.

Rail Traffic Mostly Down in September

September turned out to be a downer for rail freight traffic.

The Association of American Railroads said this week that for the month intermodal traffic fell by 4.8 percent while carload traffic was down 1.1 percent.

The percentages are in comparison to traffic in September 2021.

AAR figures showed U.S. Class I railroads originated 928,590 carloads in September 2022, decreasing by 10,639 carloads when compared with the same month last year.

The railroads last month handled 1,011,304 containers and trailers, a decline  of 51,039 units compared with September 2021.

Combined carload and intermodal originations in September 2022 were 1,939,894, down 3.1 percent, or 61,678 carloads and intermodal units when compare with the same month in 2021.

In a news release, AAR’s John T. Gray, senior vice president, said the September decline reflected a decline in consumer purchases.

He said that in late 2020 and throughout 2021 retailers overbought inventory and with slowing consumer demand they now have substantial inventories of unsold goods, which in turn is creating weak replacement demand.

With fewer consumers buying goods via the Internet, there has been less movement of trailers carrying packaged goods by rail.

The AAR said that during September six of the 20 carload commodity categories it tracks posted carload gains compared with September 2021.

These included crushed stone, sand and gravel, up 8,987 carloads or 11.2 percent; motor vehicles and parts, up 8,380 carloads or 18 percent; and coal, up 4,886 carloads or 1.8 percent. Commodities posting declines included primary metal products, down 6,341 carloads or 16.6 percent; all other carloads, down 4,879 carloads or 21 percent; and grain, down 4,227 carloads or 5 percent.

Excluding coal, carloads were down 15,525 carloads, or 2.3 percent, in September compared with the same month in 2022. Excluding coal and grain, carload traffic fell 1,298 carloads, or 1.9 percent.

Total carload traffic for the first nine months of 2022 has been 9,019,302 carloads, up 0.1 percent, or 9,791 carloads compared with the same time last year.

Intermodal traffic has been 10,259,554 units, down 5.1 percent, or 552,271 containers and trailers compared to this time last year.

Total combined traffic for the first 39 weeks of this year has been 19,278,856 carloads and intermodal units, a 2.7 percent fall compared with 2021.

Jawboning Intensifies Ahead of Rail Stoppage

With a potential national railroad strike and/or lockout a week away, a war of words has ensured in various quarters ahead of the Sept. 16 expiration of a 30-day cooling off period.

The Association of American Railroads said this week that a railroad stoppage could cost the U.S. economy more than $2 billion a day.

In a related development, U.S. Labor Secretary Marty Walsh has joined negotiations being supervised by the National Mediation Board with eight railroad unions that have not yet reached tentative agreements.

One report indicated that Walsh told both sides they should avoid messing with the nation’s fragile economy weeks ahead of elections because neither Congress nor the Biden Administration will like it.

He reportedly warned the two sides that they should not expect Congress to act to head off a railroad stoppage by approving a settlement or extending negotiations.

Five of the 12 railroad labor unions have reached tentative agreements with the National Carriers Conference Committee, which represents railroad management in labor contract negotiations.

The AAR report said a work stoppage would halt more than 7,000 trains a day and “trigger retail product shortages, widespread manufacturing shutdowns, job losses and disruptions to hundreds of thousands of passenger rail customers.”

The $2 billion impact of a work stoppage on the economy was an update of a 1992 Federal Railroad Administration econometric study to quantify the potential effects of a national rail shutdown on employment and economic output.

Railroad executives fear that a work stoppage could lead some shippers to use other modes of transportation to move freight and some of that lost business might not return to the rails.

The AAR report said that Congress might have to intervene to avert a work stoppage if negotiations fail to resolve the matter.

Some industry observers have suggested that as the Sept. 16 deadline approaches, the parties in the negotiations might voluntarily extend the deadline.

The cooling off period by federal law began upon the Aug. 16 release of the recommendations of a presidential emergency board, which was appointed by President Joseph Biden earlier this summer.

The recommendations of the PEB are not binding on the parties to the negotiations.

An analysis published on the website of Railway Age noted that one factor favoring giving negotiations more time is “outside political duress and internal financial pressure on all stakeholders, which serves to refocus reasonable minds and chill wonderfully even the most pugnacious of negotiators.”

The Railway Age report, though, said that the NCCC indicated on Thursday that railroad management is reluctant to extend the negotiating period in light of how five unions agreeing to tentative contract has set a pattern.

Any tentative contract agreements must be ratified by union members.

Union leadership has been hinting that a strike could strain the finances of the unions if they have to pay their members strike benefits that could exceed $12 million a day.

Some union members have been actively calling for a strike and may be underestimating how much it could cost them.

Strike benefits provide at best a fraction of what workers earn through regular wages and benefits.

Unions have told their members recently that during a strike they could expect no more than $100 a day in strike benefits and $1,200 maximum per month.

Strike benefits would not be paid for the first three days of a strike.

A memo sent to members of the SMART Transportation Division said the cost of paying its 37,000 members strike benefits would be more than $3.7 million per day.

SMART-TD leadership warned that strike benefits could be suspended if needed to protect the financial interests of the union.

Union workers who are away from home when a strike begins would face having to make their own arrangements to return home.

If carriers cut off health care benefits during a strike, workers would be faced with doing without health care insurance for the duration of a work stoppage or having to pay thousands of dollars a month to buy insurance at market rates.

In the meantime the website Politico.com said some of the eight unions still at the bargaining table have reached tentative agreements with the NCCC, but those have yet to be announced.

The Politico report said the unions representing locomotive engineers and conductors and the NCCC continue to be at stalemate over certain issues, including following the terms of agreements reached with the NCCC by other unions.

Leaders of T&E unions said their members have “borne the brunt of inept crew management, life-changing attendance policies, and working conditions over the past years that are making it all but impossible for rail carriers to hire and retain operating employees.”

The leaders of the SMART-TD and the Brotherhood of Locomotive Engineers and Trainmen called on Congress to stay out of the dispute.

“We are confident that the rail carriers will move from their current positions and settle with their employees in a fashion that could be ratified,” if Congress remains on the sidelines, the union leadership said.