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September’s rail volumes reflect mixed signals of broader market

US rail traffic slips 3.1% in September for carloads, intermodal units

U.S. intermodal volumes moved lower in September. (Photo: Jim Allen/FreightWaves)

Are September rail volumes an indicator of wider economic factors like an economic slowdown or not? That’s a question observers might ask as they look at this past month’s railroad traffic.

U.S. rail volumes for September totaled 1.94 million carloads and intermodal units, a 3.1% decline from the same month in 2021, according to the Association of American Railroads. Of that, U.S. carloads totaled 928,590, down 1.1% year over year (y/y), intermodal units – containers and trailers — totaled 1.01 million, a 4.8% decrease from last year.

“During September, intermodal slowed as consumers continued to switch consumption more toward services and away from goods,” AAR Senior Vice President John Gray said in a news release. “However, two underlying factors have helped magnify this trend for railroads. The first is overbuying by many retailers in late 2020 and during 2021 that is now being reflected in substantial inventories of unsold goods that weakens replacement demand. Meanwhile, a slackening of internet buying from its pandemic peak has softened trailer movements of packaged goods by rail.”

A comparison between September volumes and data from the past four weeks shows a few differences. In September, carloads for motor vehicles and parts rose 18%, carloads for coal increased 1.8%, and carloads for grain slipped 5%. 


But data from the past four weeks shows U.S. carloads are up 1.1%, while intermodal units are down 3.1%. Agricultural volumes increased 3.7%, while coal rose 3% and motor vehicle/parts carloads jumped 18%.

Agricultural products and coal volumes are less cyclical and driven primarily by commodity prices and their individual markets, so they might not be an indicator of macro weakness or strength. Carloads for motor vehicles and parts are facing an easy comparison volume-wise with last year, but volumes are below 2019 and 2020 levels as component availability continues to impair finished vehicle shipments, according to FreightWaves market expert Mike Baudendistel.

Meanwhile, year-to-date volumes for forest products, including lumber, is down 2.5% while metallic ore carloads are 7.5% lower y/y. Lower forest product volumes could indicate the beginning of a slowdown in homebuilding and a decline in metals could demonstrate the start of lower capital spending levels, Baudendistel said. 

Even the trade associations monitoring macroeconomic conditions are uncertain where the U.S. markets stand, adding to the uncertainty of whether rail volumes will go up or down.


The National Retail Federation (NRF) observed that even though high inflation and interest-rate hikes by the Federal Reserve concern consumers, they are still spending nonetheless. That continued growth in consumer spending could indicate that if the U.S. was — or is — in a recession that it could be a mild one.

“Consumers have become cautious, but they have not stopped spending,” said NRF Chief Economist Jack Kleinhenz in a news release earlier this week. “Growth is not as high as last year, but households continue to spend each month as more jobs, wage growth and savings backstop their finances and help them confront higher prices.”

NRF released its monthly economic review this week, which said that despite inflation concerns, August retail sales as reported by the U.S. Census Bureau rose 0.3% from July and up 9.1% y/y. 

Meanwhile, new home sales in the U.S. received a boost from a brief decline in mortgage rates, but sales are expected to fall in the coming months amid higher mortgage rates and falling builder sentiment, the National Association of Home Builders (NAHB) said in late September. 

New single-family homes grew 28.8% in August, the NAHB said, quoting data from the U.S. Department of Housing and Urban Development and the Census Bureau. But new home sales on a year-to-date basis from January to August are down 14%. 

“The sales gain in August reflects that there is clearly sidelined demand for housing, but it is being constrained by rising interest rates that are pricing many potential consumers out of the market, particularly entry-level buyers,” said NAHB Chief Economist Robert Dietz. “After a brief lull when mortgage rates fell below 5.3% for much of August, they have since jumped much higher in September and are now approaching 7%. The Fed should take careful note of the weakening of the housing market, given the …. lag involved with monetary policy. Housing is a leading indicator of economic conditions.”

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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.