Some Bulk Rail Cargoes Gain Despite Holiday

Strength in several raw material categories for the week ending Nov. 27 suggests new demand from manufacturers, overcoming expectations that a Thanksgiving holiday period that takes at least one and often two days out of a busy workweek would also take a big bite out of all bulk rail cargo traffic.

Greater demand would be welcome news for a factory sector that saw activity fade slightly during November, as reported by purchasing managers in the Institute for Supply Management survey.

Major North American railroads - all seven Class Is plus some regional lines in the U.S., Canada and Mexico - saw overall bulk railcar volume fall nearly 14 percent for the Thanksgiving week from the Nov. 20 week that had no holidays. That is to be expected during a major holiday, and bulk shipments were still up 2.5 percent from the Thanksgiving week of 2009.

However, the Association of American Railroads said loadings of nonmetallic minerals jumped 13.7 from a week earlier to 5,065 carloads, showing solid ongoing demand for a category that includes a range of minerals including sulfur, potassium, clay for ceramics, limestone for fertilizers and cement for construction.

Some cargoes declined by much smaller percentages than traffic overall. For instance, metal ore loadings declined just 4.4 percent from the full week before Thanksgiving, to 22,270 carloads, and semi-finished metals and metal products fell just 4.1 percent 11,748.

Those point to demand for metal fabrication from appliances and machine goods to automobiles. That would help explain why shipments of coking coal edged higher last week by 1.3 percent to 4,365 carloads, since coke is used to generate the high heat levels needed by steel-making furnaces.

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