August intermodal loadings best in US since late 2018

Rail operations recovering from Hurricane Laura

August was the best month for intermodal loadings for U.S. freight railroads since October 2018, the Association of American Railroads (AAR) said Wednesday.

August also marked the fifth-best intermodal month ever for U.S. loadings, according to AAR Senior Vice President John T. Gray.

“Despite the pandemic and the associated economic dislocations, an enormous amount of freight continues to move on railroads and other transportation modes. … Much of what’s inside the trailers and containers on an intermodal train ends up on the shelves of stores, or finds its way to consumers’ doors via e-commerce merchants. Railroads help ensure that consumers get what they want, when they want it,” Gray said. 

U.S. intermodal traffic in August rose 3% from August 2019 to 1.12 million containers and trailers. 

The increase comes amid reports about port congestion and spot price premiums on lanes that serve the Southern California ports (see here and here).

However, August’s total for intermodal volumes wasn’t enough to offset a 14.9% decrease in U.S. carloads in August. U.S. railroads originated 898,227 carloads last month, AAR said. Among the commodities that experienced year-over-year carload declines were coal, which fell 25.8%, crushed stone, sand and gravel, which slipped 25%, and petroleum and petroleum products, which dropped 14.3%.

August’s overall U.S. rail volumes were 5.8% lower, at 2.02 million carloads and intermodal units. 

Meanwhile, on a year-to-date basis, U.S. rail traffic was down 11.8% to 16.06 million carloads and intermodal units. 

U.S. rail volumes have been trending higher in recent weeks, as seen by the increases for carloads (RTOTC.USA, in blue), intermodal trailers (RTOIT.CLASSI, in orange) and containers (RTOIC.CLASSI, in green). (SONAR, using AAR data)

U.S. Gulf Coast recovering from last week’s hurricane

Hurricane Laura, the Category 4 hurricane that tore through the U.S. Gulf Coast last week, is long gone, and the railroads are seeking to fully restore service soon.

“Impacts to the railroad from Laura extended beyond industrial-related carloads, with domestic intermodal volumes also struggling regionally post-storm per some of our real-time (daily) alternative data sources, particularly in Houston and New Orleans,” said Susquehanna Financial Group transportation analyst Bascome Majors in a Wednesday note on rail volumes. “Looking ahead, as intermodal and carload shipping facilities reopen, regional volumes should start to recover sequentially, potentially with some catch up of deferred shipments and a boost in commodities to assist with rebuilding efforts in the broader region.”

Union Pacific (NYSE: UNP), which said last week that it sustained heavy damage to its rail network near Lake Charles, Louisiana, now has its service fully restored, including in the previous trouble spots in the lines from Longview, Texas, to Alexandria, Louisiana, and on to Houston.

“Union Pacific-owned industry lead tracks in the affected area are expected to return to service by the end of the day today,” Union Pacific said in a customer notification alert on Tuesday. “Generators will continue to be used throughout the Lake Charles area until commercial power is restored at all locations.”

Click here for more FreightWaves articles by Joanna Marsh.

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Joanna Marsh

Joanna is a Washington, DC-based writer covering the freight railroad industry. She has worked for Argus Media as a contributing reporter for Argus Rail Business and as a market reporter for Argus Coal Daily.