Will Intermodal, Petroleum Carry the Day for Railroads?

(BNSF Photograph)

“At first glance, rail traffic in May seems to display mixed signals,” AAR Chief Economist Rand Ghayad reported June 5. “While coal’s continued decline has led to a decrease in total carloads, a closer examination reveals that carloads (excluding coal) increased for the fourth consecutive month. Although it is unlikely that we will witness a reversal in coal’s trend, other commodities—such as intermodal traffic and petroleum—hold greater growth potential and will likely be more important strategically for railroads in the future.”

According to Ghayad, intermodal traffic spiked in May, “maintaining its upward trajectory over several months” due to “increased port activity and intensified efforts by railroads to compete in a fiercely competitive market.” He added that “solid volume gains were observed for petroleum products, chemicals and grain.”

U.S. Class I railroads handled 1,060,801 carloads in May 2024, down 6.0%, or 67,145 carloads, from the prior-year period, according to the AAR (Association of American Railroads). They also carried 1,281,248 containers and trailers, up 7.6%, or 90,744 units, from last year. Combined U.S. rail traffic came in at 2,342,049 carloads and intermodal containers and trailers, up 1%, or 23,599 carloads and intermodal units, from last year.

In May 2024, 12 of the 20 carload commodity categories tracked by the AAR each month saw carload gains compared with May 2023. These included petroleum and petroleum products, up 7,123 carloads or 15.4%; chemicals, up 5,023 carloads or 3.2%; and grain, up 4,418 carloads or 4.7%. Commodities that saw declines included coal, down 69,404 carloads or 22.0%; crushed stone, sand and gravel, down 12,569 carloads or 11.4%; and primary metal products, down 3,016 carloads or 7.2%.

Excluding coal, carloads were up by 2,259, or 0.3%, in May 2024 from May 2023. Excluding coal and grain, carloads were down by 2,159, or 0.3%.

Total U.S. carload traffic for the first five months of this year came in at 4,683,510 carloads, dipping 5.0%, or 247,984 carloads, from the same point in 2023; and 5,568,464 intermodal units, rising 8.7%, or 443,453 containers and trailers, from 2023.

Total combined U.S. traffic for the first 22 weeks of this year was 10,251,974 carloads and intermodal units, a 1.9% gain over 2023.

Week Ending June 1,2024

Total U.S. rail traffic for the week ending June 1, 2024, was 450,077 carloads and intermodal units, an increase of 2.4% compared with the same point in 2023. Total carloads came in at 206,236, a 5.9% fall-off from the prior-year period, while intermodal volume was 243,841 containers and trailers, a 10.7% rise from last year.

Six of the 10 carload commodity groups posted an increase for the week ending June 1, 2024, compared with the same week last year. They included grain, up 2,947 carloads, to 19,049; farm products excluding grain, and food, up 1,010 carloads, to 16,075; and petroleum and petroleum products, up 927 carloads, to 10,006. Commodity groups that posted decreases included coal, down 12,514 carloads, to 51,817; nonmetallic minerals, down 4,514 carloads, to 27,128; and miscellaneous carloads, down 1,306 carloads, to 7,996.

North American rail volume for the week ending June 1, 2024, on 10 reporting U.S., Canadian and Mexican railroads totaled 310,890 carloads, dipping 2.6% from the same week in 2023, and 327,199 intermodal units, increasing 8.2% from last year. Total combined weekly rail traffic in North America was 638,089 carloads and intermodal units, up 2.7%. North American rail volume for the first 22 weeks of this year came in at 14,459,420 carloads and intermodal units, up 2.0% from 2023.

Canadian railroads reported 88,149 carloads for the week ending June 1, 2024, up 3.3%, and 71,065 intermodal units, down 2.0% from the same point last year. For the first 22 weeks of this year, they reported cumulative rail traffic volume of 3,544,980 carloads, containers and trailers, up 0.7%.

For the week ending June 1, 2024, Mexican railroads reported 16,505 carloads, a 13.2% bump up from the same week last year, and 12,293 intermodal units, a 29.8% gain over last year. Their cumulative volume for the first 22 weeks of 2024 was 662,466 carloads and intermodal containers and trailers, rising 11.6% from the prior-year period.

Further Reading:

• AAR: Decreased Coal Shipments Cause U.S. Rail Declines in April
• Intermodal: March’s ‘Bright Spot,’ AAR Reports
• AAR: February Data Shows Elements That ‘Inspire Optimism, Call for Caution’