Decline in U.S. rail volumes persists

And while Canadian grain volumes were 1.7% lower year-to-date, at 385,861 carloads, weekly grain volumes were 10.3% higher at 9,917 carloads. The gains follow recent reports from Canadian National (NYSE: CNI) and Canadian Pacific (NYSE: CP) that both railways (CP and CN) moved record grain volumes in October.

Headwinds still present at the end of the year

Rail observers will be watching how long the lower volumes will persist into 2020. For now though, trade uncertainty could be a factor in the slump in rail volumes, particularly volumes that pass through the U.S. West Coast.

FreightWaves’ market analyst Zach Strickland reported recently that U.S. import volumes at the ports of Los Angeles and Long Beach, California, fell sharply between Oct. 21 and Nov. 2. He also said rail volumes of international containers fell by over 30% from Oct. 24 to Nov. 4 in the L.A. to Chicago lane.  Domestic style containers, 48- and 53-feet, also declined 33% in the same timeframe.

While some of that decline could be attributed to shippers’ shifting preferences to the East Coast on a seasonal and cyclical basis, the data could also be pointing to diminished import activity compared with 2018, he said.

Meanwhile, FreightWaves also reported that the Port of L.A. put out a study earlier this week suggesting that tariffs the U.S. imposed over the past two years – and retaliatory tariffs that followed – threaten more than $186 billion in U.S. economic activity and could add $31 billion to $35 billion in additional costs to manufacturers and consumers.