Posts Tagged ‘railroad freight traffic’

Class 1 Systems Saw Traffic Gains in 1st Quarter

April 9, 2021

Impressive gains in intermodal traffic helped North America’s Class 1 railroads systems post volume gains during the first quarter of 2021.

Industry observers say a surge in retailers seeking to restock shelves has boosted interemodal volume.

That was welcome news for railroads because the first quarter saw them see suffer slight declines in carload volume.

Among the seven Class 1 systems, Canadian National came out on top with an 8.2 percent increase in overall volume compared with the same period in 2020.

However a mitigating factor in CN’s case is that it looks good compared with last year because this year it didn’t have to deal with illegal blockades of its tracks that lasted for weeks.

Norfolk Southern posted a 5 percent volume gain fueled largely by 8 percent intermodal growth and a nearly 5 percent rise in coal traffic.

At CSX traffic was up nearly 3 percent, led by a 12.3 percent boost in intermodal business.

CSX and NS alike enjoyed increased traffic from East Coast ports as well as parcel traffic related to e-commerce.

Traffic gains for other Class 1 railroads included BNSF, 7.3 percent and Union Pacific, 1 percent. Canadian Pacific’s first quarter traffic traffic was flat compared with last year’s first quarter, when it had a 10 percent gain partly due to picking up some traffic that could not move on CN during the blockades.

 “When much of the economy shut down around this time last year, rail volumes plummeted too. We have to take that into account when comparing rail traffic this year to last year,” said Association of American Railroads Senior Vice President John T. Gray.

“That said, rail traffic has clearly rebounded from last year’s depths. Looking ahead, rail volumes are highly correlated with manufacturing output, so recent signs of strength in manufacturing are good signs for railroads too.”

All Class 1 Railroads Lost Traffic in 2020

January 5, 2021

All North American Class 1 railroads lost traffic volume in 2020, but some lost more than others.

Weekly carload reports issued by the Association of American Railroads show that Canadian Pacific suffered the least loss of traffic.

CP’s volume fell 2.2 percent compared to the average 6.8 percent decline of the big six systems.

CSX posted a 5.7 percent decline in overall traffic in 2020 but also had the industry’s largest intermodal gain for the year at 1.5 percent.

Canadian National had overall volume decline of 6.1 percent. Other traffic declines posted by Class 1 carriers included Union Pacific, down 7 percent; BNSF, down 7.6 percent; and Norfolk Southern, down 11.9 percent.

NS sustained the steepest declines among Class 1 carriers in intermodal, carload, and coal traffic.

Intermodal Continued its Hot Streak

December 31, 2020

Intermodal continued to lead the way in the latest weekly U.S. rail freight statistics released by the Association of American Railroads.

For the week ending Dec. 26 intermodal traffic rose 20.8 percent. AAR said the railroads last week handled 220,082 containers and trailers.

At the same time, the carriers moved 185,029 carloads for the week, a decline of 3.4 percent compare with the same week in 2019.

Bolstered by intermodal, total carload and intermodal traffic was 405,111 units, an increase of 8.4 percent.

Four individual carload commodities posted gains led by grain, which was up 40.2 percent while motor vehicles and parts rose 19.2 percent.

Coal fell by 9,611 carloads to 50,742; metallic ores and metals were down 1,589 carloads to 18,330, and chemicals were down 1,394 carloads to 27,479.

Intermodal Continues Driving Freight Traffic

December 24, 2020

Intermodal traffic continued to drive U.S. freight volume for the week ending Dec. 19.

The Association of American Railroads reported this week that railroads handled 520,305 carloads and intermodal units. which was up 2.5 percent compared with the same week in 2019.

Total carloads were 230,838, down 5.8 percent compared with the same 2019 period, while U.S. weekly intermodal volume was 289,467 containers and trailers, up 10.3 percent compared with 2019.

Two of the 10 carload commodity groups posted gains compared with 2019 period.

Grain was up 4,274 carloads to 25,860, while chemicals was up 879 carloads, to 33,276.

Commodity groups seeing declines included coal, down 9,907 carloads to 62,110; nonmetallic minerals, down 4,300 carloads to 25,840; and petroleum and petroleum products, down 2,416 carloads to 11,701.

For the first 51 weeks of 2020, U.S. railroads reported cumulative volume of 11,094,786 carloads, a 13.2 percent decline from the same point last year; and 13,235,629 intermodal units, a 2.3 percent decrease from last year.

Total combined U.S. traffic for the first 51 weeks of 2020 was 24,330,415 carloads and intermodal units, down 7.6 percent compared with last year.

Intermodal Growth Seen Continuing into 2021

December 13, 2020

A railroad industry consulting firm has predicted that intermodal traffic will continue growing in 2021 but carload traffic will continue to struggle to recover from the COVID-19 pandemic.

FRT Transportation Intelligence predicted that intermodal traffic will increase by 5.4 percent in 2021 with most of that growth attributed to retailers restocking their inventories due to consumer demand.

Domestic container volume will rise by 6.2 percent while trailer volume is expected to hold steady.

The latter has been in decline in recent years but has received a boost in recent weeks by tight capacity in the trucking industry and a shortage of truck drivers.

FRT projects international intermodal volume to increase by 5.4 percent in 2021.

Todd Tranausky, vice president of rail and intermodal at FTR, said last week that those who still have jobs have shifted their discretionary spending from services to consumer goods as a result of pandemic-related factors such as social distancing.

Intermodal volume in past years has declined after its fall peak, but that had not been the case this year, Tranausky said.

Tranausky said a variable that could affect intermodal volume is the distribution of COVID-19 vaccines.

If vaccines help led to a diminishing of the pandemic in the second half of next year that could prompt consumers to begin spending again on such services as restaurants, theaters and cultural events.

In the meantime, FTR expects intermodal volume for 2020 to be 2.5 percent below 2019 levels despite increases in recent months in intermodal traffic.

As for carload traffic, it is tied to industrial production, which has lagged during the pandemic as it struggles to reach pre-pandemic levels.

Except for coal, agriculture and anything tied to crude oil, FRT expects carload traffic in 2021 to be flat.

The consulting firm sees some recovery in the first quarter and that second quarter year-over-year numbers will show large gains due to being compared to the pandemic-related traffic levels of 2020. 

Tranausky said carload volumes in the third and fourth quarters of 2021 will hinge on how the pandemic and consumer spending unfold, as well as whether there’s a federal stimulus and what shape it takes.

Grain Shows Slight Gain Over 2019 Levels

October 29, 2020

U.S. rail freight traffic for the week ending Oct. 24 showed a slight increase due to rising intermodal volumes.

The Association of American Railroads said total traffic was 522,653 carloads and intermodal units, a 1.9 percent increase over the same week in 2019.

However, the 227,543 carloads represented a decline of 6.5 compared to the same week last year.

The 296,110 intermodal containers and trailers handled by the railroads was a 9.4 percent gain.

Five of 10 carload groups posted increases over 2019 levels, led by grain, up 23.2 percent.

Of the five categories that fell, the biggest losses were petroleum and petroleum products (down 21.8 percent) and coal (down 21.5 percent).

The 20,164,031 carloads and intermodal units to date is a 9.6 percent decline from 2019.

Grain traffic shows a gain over 2019 of 0.2 percent.

All other commodity groups remain down, led by coal (minus-26.4 percent) and motor vehicles and parts (minus-22.6 percent).

Panelists See Slow Freight Rebound

August 27, 2020

Railroad industry analysts predicted this week that the COVID-19 pandemic will cause fundamental changes in the U.S. economy that will result in limited railroad freight traffic growth over the year.

The prediction was made during a webcast sponsored by the Midwest Association of Rail Shippers with panelists saying the pandemic has caused a great deal of economic uncertainty and the recovery that began in June remains fragile.

“We are not even close to getting back to equilibrium,” said Eric Starks, CEO of FTR Transportation Intelligence.

Straks expects the economic downturn will linger until there is an effective COVID-19 vaccine available.

Another member of the FTR firm, Todd Tranausky, said that in recent weeks intermodal traffic has gotten a boost from the need of retailers to restock their inventories.

Intermodal traffic also has benefited from tightening truck capacity, prompting shippers to turn to rail to move goods.

This has included parcel shippers seeking a relief valve for moving their packages.

For now, importers are routing more good via West Coast ports in order to get them to consumers faster.

However, he said that carload volume will be much slower to rise because industrial inventories are already at high levels.

FTR expects carload traffic to lag through at least the first quarter of 2021.

“It’s going to be a very slow, very uneven slog back to growth in the carload sectors,” Tranasuky said.

Loss of Coal Traffic Drove Class 1 Freight Volumes Downward During 2nd Quarter of 2020

July 3, 2020

Loss of coal traffic was a major driver in sharp volume declines for North America’s Class 1 railroads in the second quarter of 2020.

The carriers posted an aggregate 19 percent decline during the period with Norfolk Southern taking a 56 percent hit.

From a historical perspective, coal traffic was down 34 percent when compared to the volumes posted in the second quarter of 2019.

NS also suffered a steep 26 percent drop in overall traffic during the second quarter of 2020 due to shut downs of automotive plants amid the COVID-19 pandemic.

Automotive plants were closed during April and much of May but have since reopened.

Intermodal traffic was down a collective 11 percent for the Class 1 railroads during the quarter.

It also presented a sharp contrast. On one hand parcel shipments increased as consumers relied more heavily on e-commerce during stay home order periods.

But that was more than offset by the closure of numerous retail stores and falling international intermodal shipments because retailers maintained high levels of inventory during their shutdowns.

Carload traffic for the Class 1 railroads was down 22 percent collectively with NS suffering the greatest loss at 30 percent. This category excludes coal and intermodal shipments.

Second quarter financial results for publicly traded Class I railroads will be released later this month.

Weekly Freight Loss Slightly Smaller

May 28, 2020

The latest weekly freight volume report contained a small bit of encouraging news.

For the week ending May 23, freight volume was down by double digits, but not down as much as it has been in previous reports.

AAR said weekly rail traffic was 428,715 carloads and intermodal units, down 19.2 percent when compared with the same week of 2019.

Total carloads were 190,639 carloads, down 27 percent compared with 2019 while intermodal volume was 238,076 containers and trailers, down 11.2 percent compared to 2019.

None of the 10 carload commodity groups posted an increase compared with the same week in 2019.

Among the weekly declines when comparing 2020 to 2019 were coal, down 32,660 carloads, to 46,863; motor vehicles and parts, down 12,171 carloads, to 4,874; and metallic ores and metals, down 8,733 carloads, to 14,805.

“Of the 20 carload categories we track, 15 had modestly higher loadings last week than the week before, led by motor vehicles and grain,” said AAR senior vice president John Gray.

Gray said intermodal originations were higher last week than in any of the previous 11 weeks.

“While we can’t yet say whether rail traffic and, by extension, the economy, have turned a corner, these are all encouraging signs,” he said.

“As areas across the country begin to reopen over the next several weeks, perhaps we can start looking for light at the end of what has become a rather long tunnel.”

For the first 21 weeks of 2020, U.S. railroads reported cumulative volume of 4,533,784 carloads, down 14.3 percent from the same point last year; and 4,970,889 intermodal units, down 11.3 percent from last year.

Total combined U.S. traffic for the first 21 weeks of 2020 was 9,504,673 carloads and intermodal units, a decrease of 12.8 percent compared to last year.

Consumer Spending a Key to Freight Rebound

May 28, 2020

One railroad CEO believes that consumer behavior will determine how much railroad traffic rebounds from the economic downturn triggered in part by the COVID-19 pandemic.

Union Pacific CEO Lance Fritz said Wednesday during a webinar that was part of the Bernstein 36th Annual Strategic Decisions Conference that rail traffic depend on global trade, North American industrial production and consumer spending.

Of the three he said consumer spending is the most difficult to predict.

Some consumers can’t wait to get out and start spending money again but others don’t feel it is safe to go out to shop, dine at restaurants, or take in a show.

“I think consumers are all over in between those two goalposts,” Fritz said of the can’t wait to spend versus don’t want to go out yet extremes.

He said said consumer spending can be encouraged to get up off the floor if local governments and business can persuade those who’d rather not get out that it is safe to do so.

Fritz said UP traffic this month has stabilized its free fall to around 23 percent below where it was at this time last year.

That just about matches the company’s prediction of a second-quarter decline of 25 percent.

UP has managed to claw back traffic from highways, but Fritz said it doesn’t show up yet because of volume losses due to the economic downturn.