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6/7/2013


Rail News: Rail Industry Trends
AAR on May: U.S. roads registered first carload gain in 16 months, 42nd straight intermodal increase



May was a good month for U.S. railroads. They registered their first monthly carload increase in 16 months and garnered their 42nd straight monthly intermodal volume gain, according to the Association of American Railroads (AAR).

In May, originated U.S. carloads totaled 1,401,584, up 0.7 percent, and intermodal volume totaled 1,214,116 containers and trailers, up 3 percent compared with May 2012 levels. The weekly intermodal average of 242,823 units was the highest for any May on record, AAR officials said in a press release.

Eleven of 20 major commodity categories posted gains, led by petroleum and petroleum products (41.8 percent), motor vehicles and parts (6.2 percent), and crushed stone, gravel and sand (5.2 percent). Grain traffic fell 20 percent, primary metal products volume dipped 7.2 percent and grain mill product loads declined 6.9 percent. Carloads excluding coal and grain rose 3.6 percent.

"The economy is still not firing on all cylinders, and rail traffic in May reflects that," said AAR Senior Vice President of Policy and Economics John Gray. "Pockets of rail traffic growth, such as autos, nonmetallic minerals, and commodities related to crude oil extraction are being countered by continued weakness in steel-related commodities, paper, and grain, among others."

The bad news in the grain sector is that the cold, wet spring has delayed corn plantings and railroads' ag volumes might not pick up until sometime in the second half, according to Robert W. Baird & Co. Inc.'s latest "Rail Flash" report.

"Through June 2, 91 percent of projected plantings are in the ground, below the 95 percent average and 100 percent of last year," Baird analysts said, adding that corn represents about half of grain carloads and 25 percent of total ag carloads.

AAR data also shows that May ended well for all North American railroads. In the month's last week ending June 1, U.S. roads originated 269,276 carloads, up 1.6 percent, and 221,806 intermodal loads, up 3.7 percent year over year. Canadian railroads increased weekly carloads 8.1 percent to 75,101 units and boosted intermodal volume 21.1 percent to 53,959 units, while Mexican railroads cranked up weekly carloads 13.6 percent to 16,393 units and ratcheted up intermodal volume 5.3 percent to 10,060 units.

Through 2013's first 22 weeks, 13 reporting U.S., Canadian and Mexican railroads totaled 8,139,410 carloads, down 0.4 percent, and 6,611,024 containers and trailers, up 4.2 percent compared with the same 2012 period.

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