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Rail Roundup: Groups laud nominee Buttigieg; US rail traffic up

Also, U.S. weekly carloads down 2% while intermodal volumes up 11%

President-elect Joe Biden nominates Pete Buttigieg as secretary of transportation (Photo: Jim Allen/FreightWaves)

Freight rail stakeholders are offering early congratulations to former presidential candidate and South Bend, Indiana, Mayor Pete Buttigieg for his nomination to President-elect Joe Biden’s Cabinet.

Biden nominated Buttigieg to become secretary of transportation and lead the U.S. Department of Transportation (DOT).

The stakeholders offer support amid hopes that the White House and Congress will agree upon transportation initiatives — including a bipartisan infrastructure bill — that would find support not only among rural and urban constituents but also among manufacturers.

The groups will also be watching how Buttigieg and the DOT respond to technological advances within transportation.

“Former-Mayor Buttigieg’s forward-looking approach supported by data-driven decision making will serve him well as the next Secretary of Transportation,” said Association of American Railroads (AAR) President Ian Jefferies. “On behalf of AAR and the nation’s rail industry, we look forward to working with Mr. Buttigieg to modernize the nation’s surface transportation.”

Chuck Baker, president of the American Short Line and Regional Railroad Association, said, “His background as mayor, his military service, and his experience as a presidential candidate have well-prepared him to understand the importance of freight transportation services and infrastructure. His reputation as a practical problem solver with a vision for the future is a great match for our industry, and we look forward to working with him and his team at the USDOT. 

“Short lines are well positioned to address many of President-elect Biden and Buttigieg’s priorities — to grow the economy and to connect thousands of agricultural, energy, and manufacturing employers in rural and small town America to domestic and global markets in a safe, efficient, and environmentally friendly way,” Baker said.

The Railway Supply Institute said it hoped Buttigieg’s experience as a small-town mayor would guide him toward infrastructure investments that support local communities.

“As a former mayor, Pete Buttigieg knows firsthand how rail infrastructure investments can strengthen our communities and deliver thousands of well-paying jobs to American workers and we look forward to working with him in his new role at the Department of Transportation,” said Nicole Brewin, RSI vice president of government and public affairs.

Meanwhile, shippers are also watching how the nomination of Buttigieg will affect their industries. 

Said Soy Transportation Coalition Executive Director Mike Steenhoek: “Given his background in the Midwest and, more recently, his extensive travels throughout Iowa and other rural states, I am confident Mayor Buttigieg understands that our nation’s transportation strategy must address the needs of both urban and rural America,

Steenhoek continued, “If we hope to see the U.S. farmer remain the most competitive in the world, it will require sufficient investments in each link in the agricultural supply chain — rural roads and bridges, highways and interstates, freight railroads, the inland waterway system, and our ports. Upon his confirmation, farmers look forward to working with Secretary Buttigieg in promoting each of these essential modes of transportation.”

Steenhoek also said he hoped that one of President Joe Biden’s early initiatives will be a comprehensive infrastructure plan that will find bipartisan support. 

Unions will also be watching. Said the Transportation Trades Department of the AFL-CIO, “Buttigieg will inherit a transportation network and physical infrastructure that was already in bad shape, and only made worse by COVID-19, a regulatory system that has not kept pace with the needs of our transportation network or its workforce, and the introduction of new technologies that could forever change how people and goods move.”

US weekly rail volumes up nearly 5%

U.S. weekly rail traffic rose 4.9% last week as carload volumes narrowed their year-over-year deficit while intermodal traffic moved higher. 

U.S. rail volumes totaled 546,209 carloads and intermodal units for the week ending Saturday, according to AAR data. Last week’s traffic was nearly 5% higher than the same period in 2019.

Of that, U.S. carloads were 2.2% lower at 238,198, while intermodal units were up 11.1% to 308,016 intermodal containers and trailers. On a sequential basis, carloads slipped 2.8% while intermodal traffic rose 3.6%.

Year-to-date U.S. volumes are 7.8% lower than the same period in 2019, at 23.8 million carloads and intermodal units. Of that, intermodal traffic is down 2.6% to 12.9 million units while carloads are down 13.3% to nearly 10.9 million carloads. 

U.S. rail carloads (blue: RTOTC.USA), intermodal trailers (orange: RTOIT.CLASSI) and containers (green: RTOIC.CLASSI) over the past year. (FreightWaves SONAR)

Higher intermodal volumes come as November retail sales are up 4.1% year-over-year but down 1.1% from October, according to the U.S. Census Bureau.

Despite the sequential drop, the National Retail Federation (NRF) said November was the sixth consecutive month showing a year-over-year gain. The trade group was optimistic that the remainder of the year could bode well for December’s figures amid holiday shopping sprees, although the coronavirus pandemic is one factor that could influence how much December’s figures change year-over-year.

“Consumers held back on spending in November as virus rates spiked, states imposed retail restrictions and congressional stimulus discussions were gridlocked,” NRF President and CEO Matthew Shay said. “While consumers have been bolstered by increases in disposable income and savings, it’s clear that additional fiscal stimulus from Congress is needed and we are hopeful it will be passed soon as we enter the final stretch of the holiday season.”

NRF’s calculations of retail sales show a 10.5% increase year-over-year in November and a 0.1% decrease from October. NRF says its calculations exclude automobile dealers, gasoline stations and restaurants.

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Related articles:

Biden nominates Pete Buttigieg as DOT secretary

Shippers, unions, railroads take sides at Senate hearing

Rail groups gear up for infrastructure bill fight

Rail stakeholders: Tough road ahead for infrastructure bill

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.