Weekly carloads provide more of the same…pain

In June, U.S. railroads reported 1,023,394 carloads (excluding intermodal), down 5.3 percent year-over-year. U.S. intermodal shipments were down 7.2 percent year-over-year in June at 1,075,974 units.

Coal continues to provide a headwind to U.S. rail traffic. Excluding coal movements, carloads were down 3.6 percent year-over-year in June.

Economic uncertainty and loose truck capacity continue to provide the rails with headwinds. With $300 billion in proposed tariffs on Chinese goods temporarily tabled and China’s new promise to buy soybeans from the U.S., it remains to be seen if this will translate into an increase in carloads in the near-term. Further, the industry is still contending with residual weather-related network outages.

“June marked the fifth straight monthly decline for total U.S. rail carloads and for U.S. intermodal traffic. Manufacturing is responsible for much of the rail traffic base, but U.S. manufacturing output has been falling for several months. Housing is also in the doldrums, and trade is suffering because of tensions with trading partners overseas. Taken together, demand for rail service just isn’t as strong as it was six months or a year ago. Obviously, railroads hope things turn around, both for their own sake and for the sake of the broader economy,” said AAR Senior Vice President John T. Gray.

Total U.S. carloads for the first half of 2019 are 3.1 percent lower than the same period in 2018 at 13,476,479 carloads and intermodal units.