Bulk Railcar Traffic Dropped in April

Bulk Railcar Traffic Dropped in April

April loadings of bulk commodities and other cargoes aboard large freight cars declined in April for major U.S. railroads, which could suggest some weakness in economic momentum.

The Association of American Railroads, in its latest monthly report on rail activity, said while intermodal traffic is growing, the large U.S. rail lines originated 1.18 million carloads in April, which was only down 0.2 percent from the same month last year and mainly due to coal volume.

When adjusted for usual seasonal traffic flows, carloads also fell 2.5 percent just from March 2011. The AAR said that’s in keeping with an up-down monthly trend of recent years, and the overall carloads trend is still climbing since the recession bottomed in mid-2009.

By the Numbers: U.S. IMC Intermodal Yield 

However, for the past six months the trend for seasonally adjusted carloads has been flat, the trade group said, “and over the past four months it’s actually been down a bit.”

John Gray, senior vice president and the AAR’s top economist, said that “rail traffic deserves a close watch over the next several months because it’s a useful gauge of the strength of the economy.” He also said April’s year-over-year activity compares against strong volume in April 2010 and that coal traffic last month was down for the first time since last July.

The economy grew at just a 1.8 percent annual rate in the first quarter, and the nation’s unemployment rate edged up to 9 percent in April from 8.8 percent in March.

Carloadings include a broad range of cargoes from coal, bulk grain and chemicals to lumber, scrap metal, factory-made metal products, and equipment including automobiles and tractors.

U.S. traffic slowed down this year because of huge snowstorms that snarled the key rail hub area of Chicago and then backed up shipments around the country for weeks. This spring has seen numerous track outages and shipment delays from flooding and the effects of severe storms including a tornado rampage in the South.

However, traffic catches up from temporary disruptions if demand remains. The AAR said positive signs include expanding rail employment through March, growth in chemicals traffic, which is an indicator of factory demand, and continued intermodal strength.

-- Contact John D. Boyd at jboyd@joc.com. Follow him on Twitter @jboydjoc.