U.S. rail volumes on a weekly basis rose 2% amid a 11% increase in intermodal traffic.
U.S. freight railroads originated 518,763 carloads and intermodal units for the week ending Saturday, rising 2.2% from the same period a year ago, according to the Association of American Railroads.
Of that, weekly intermodal traffic totaled 291,935 intermodal containers and trailers, a 11.3% increase from the same period a year ago, while carloads were 7.5% lower, at 226,828.
Year-to-date U.S. rail volumes totaled 19.6 million carloads and intermodal units, which is 9.8% lower than the same period in 2019.
Intermodal traffic has been trending higher since the pandemic-induced volume trough of April and May, with volume rising throughout the summer and into fall as social distancing restrictions loosened. E-commerce also fueled consumer activity.
Indeed, the U.S. Census Bureau said last Friday that retail sales in September rose 1.9% on a seasonally adjusted basis from August, and they were 5.4% higher year-over-year.
“Retail sales are continuing to build on the momentum we’ve seen through the summer and have been boosted by an improving labor market, a rebound in consumer confidence and elevated savings,” Jack Kleinhenz, the National Retail Federation (NRF) chief economist, said of the results. “A significant number of people remain unemployed but more are going back to work and that makes them confident about spending. September retail sales reflect the support of government measures and elevated savings that is being spent now that consumers are shopping again.”
He continued, “With less spending on personal services such as travel and entertainment outside the home, some of that money is shifting to retail cash registers. All in all, these numbers and other economic data show the nation’s economy remains on its recovery path.”
NRF and the Class I railroads that have reported third-quarter earnings so far have said they’re seeing a strong fall peak due to a combination of restocking and pent-up consumer demand.
“The consumer is still very, very strong and we expect a robust peak season,” said Mark Wallace, executive vice president of sales and marketing for CSX (NASDAQ: CSX). Wallace was speaking to investors during his company’s third-quarter earnings call on Wednesday.
NRF’s analysis of retail sales, which excludes automobile dealers, gasoline stations and restaurants, determined that September retail sales were up 1.3% on a seasonally adjusted basis from August and were 12% higher year-over-year.
“We’re optimistic about the prospects for a strong holiday season, as people want something to look forward to and bring joy to their lives,” NRF President and CEO Matthew Shay said. “While it’s been a challenging year for everyone, there’s been an enormous amount of innovation within the retail industry and retailers have demonstrated that we can keep the economy open and operating safely.”
CSX, Union Pacific announce leadership changes
Besides reporting third-quarter earnings this week, CSX and Union Pacific (NYSE: UNP) also announced some changes to their leadership rosters.
CSX said Monday that it has promoted Arthur Adams to senior vice president of sales. He assumes the new role immediately.
“Arthur is an integral part of the CSX leadership team. His promotion reflects the value he brings to the sales and marketing organization as we execute our plan to grow the business by leveraging our superior service product,” Wallace said. “His demonstrated leadership abilities, his knowledge of our merchandise business and his strategic vision are invaluable as we implement our strategy to provide customers with more value-added solutions throughout their supply chain and enhance customer engagement.”
Adams will be responsible for the sales portfolios within agriculture and food, chemicals, fertilizers, paper and forest, metals, and minerals, as well as leading customer engagement and TRANSFLO, according to CSX. He will report to Wallace.
Adams joined CSX in 2007 and most recently served as vice president of sales and supply chain solutions. He was also head of the marketing service and led the transformation of customer service operations and e-solutions enhancements, CSX said.
Meanwhile, Union Pacific (UP) said Tuesday that Chief Operating Officer Jim Vena will transition to a senior adviser role. Eric Gehringer will succeed Vena as executive vice president of operations, effective Jan. 1. Vena will remain at UP though June 2021.
Vena joined UP in January 2019 and led the company’s transition to precision scheduled railroading (PSR), an operating model that seeks to streamline operations. UP calls its version of PSR Unified Plan 2020.
“Jim’s contributions to Union Pacific over the last two years have been tremendous,” said UP Chairman, President and CEO Lance Fritz. “He helped our team achieve efficiency savings of over $1 billion and deliver the best service product in the company’s history. Jim’s time at the helm of our operations has positioned Union Pacific well for 2021 and beyond.”
Vena will spend much of his remaining time at UP in the field to help complete the leadership transition. Gehringer will lead all of UP’s operating functions.
Gehringer currently serves as senior vice president of transportation. He has been with UP for 15 years. He started in engineering and rose through the ranks to become head of the engineering and mechanical department.
“Throughout his career, Eric has used innovation and astute business acumen to solve problems on the railroad,” Fritz said. “His proven ability to build teams and get results across all business metrics will serve us well.”
Gehringer has a Master of Business Administration degree from the University of Nebraska-Lincoln, as well as a degree in aerospace engineering from St. Louis University.
Vena, who came to Union Pacific following a long railroad career, said, “I couldn’t have asked for a better opportunity to drive change over the last two years at Union Pacific. We made terrific progress toward being the safest, most reliable and most efficient railroad in North America and I am very proud of our accomplishments. The team has been great to work with and I am confident Eric is well positioned to drive further gains in 2021 and beyond.”
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