Short Lines Edge Higher

Short line railroads have posted their best three weeks of freight volume since March, suggesting a mild pickup may be under way after traffic slumped severely in the spring.

While unit totals in combined bulk carload and intermodal traffic remains at least 22 percent below the same period in 2008, railroads reporting to the RMI RailConnect index hauled 91,135 units in the week ending June 20, 88,564 a week before that and 91,175 loads in the June 6 week.

For April and May, loadings topped 90,000 just once, and never had a sustained pace above 88,000. For the first three months of 2009, short line volume never fell below 90,000 and even topped 100,000 loads in the first half of February.

RMI gets information from 344 to 348 small North American railroads, the lion’s share of an industry that has over 500 short lines in all.

The latest traffic levels certainly do not indicate a surge in freight demand. But the year-over-year declines of about 25 percent are an improvement from the one-third declines seen through much of the spring. They are also in line with growing signs of a bottoming in the downturn, and of pickups in some freight categories.

For instance, chemical tank loads hauled – the single-largest category for short lines and the second-largest for Class I carriers – appear to have steadied in a range mildly higher than for April and May. Loadings have been in the 15,000 weekly range for three weeks now, up from 14,800 or lower in recent months.

Scrap material hauls, usually gondolas of scrap metal headed for recyclers, have also notched higher. Both scrap and chemicals are early indicators of factory demand, so the recent railcar trend is in line with a mild but persistent improvement in factory activity.

Another cargo group that has steadied above its spring lows is the stone, clay and aggregates category that is linked to road building and other basic construction.

Short lines are not major carriers of intermodal containers or trailers, and their box loadings are running about 48 percent behind the 2008 pace. Recent weeks have seen little sign of improvement in that traffic, which is often linked to final retail goods shipments.

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