Rail Traffic Fell Sharply in April

With all the talk about the economy starting to find a bottom to its steep downturn, large railroads are still seeing declines so large that a key industry official is sounding a warning.

“It’s hard to find much in rail traffic data in April to support the idea that the economy is starting to see ‘green shoots’ — it may still just be weeds,” said John T. Gray, senior vice president at the Association of American Railroads.

AAR said carloadings of bulk materials and other large-scale cargoes at major U.S. railroads fell 23 percent for the month, while rail hauls of intermodal containers and trailers fell 17.9 percent.

At the two big Canadian carriers, their combined Canada and U.S. operations saw carloads fall 26.4 percent, and intermodal 18.2 percent.

But while AAR may want to avoid looking cheerful, its latest weekly data continued a recent trend of showing limited but persistent improvement in several categories.

For instance, intermodal loadings by major U.S. railroads were down 16.8 percent from a year earlier in the week ended May 2, a bit worse than the year-to-date decline of 16.2 percent. Still, the 187,203 boxes that trains picked up was the best level in five weeks, and the second highest since mid-February. That was when intermodal hit a sustained slump both from faltering demand and a series of winter storms and springtime floods that further cut into traffic during March and well into April.

Among carloads, U.S. railroads have originated more than 27,000 chemical loads for three straight weeks, for the strongest sustained levels of the year. Since chemicals are an early indicator of factory demand, those rail shipments are consistent with a mild but steady pickup in part of the factory sector.

And in line with growing highway repairs as the Recovery Act money starts to churn through the economy, rail hauls of basic construction materials – crushed strong, sand and gravel – last week reached the highest level of 2009.

Both of those cargoes are still far down from year-ago levels, with chemicals nearly 18 percent behind the 2008 pace and the stone-sand-gravel category more than 20 percent behind.

But they are also large cargoes for railroads as well as early signals of economic activity. Chemicals make up the second-largest rail cargo, behind only coal, while the stone/sand group ranks fourth.

Contact John D. Boyd at jboyd@joc.com.