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2/14/2014



Rail News: Rail Industry Trends

North American rail traffic was mostly on the decline in week No. 6


For the week ending Feb. 8, U.S. railroads reported 261,254 carloads, down 4.3 percent, and 246,114 intermodal units, up 0.6 percent compared with volumes from the same week last year, according to the Association of American Railroads.

Total combined U.S. traffic dipped 2 percent to 507,368 units. Only four of 10 carload commodity groups posted gains, including farm and farm products excluding grain at 5.8 percent and grain at 4 percent. Coal volume declined 8.4 percent.

However, Arch Coal has noted improving trends in the domestic thermal coal market. The company estimates that coal consumption for U.S. power generation rose by 35 million tons in 2013 while production fell to its lowest level since 1993, helping to significantly reduce coal stockpiles, said Robert W. Baird & Co. Inc. analysts in their weekly "Rail Flash" report.

"Arch believes favorable weather and power demand combined with elevated natural gas prices will lead to further tightening in the domestic thermal coal market as inventories decline further — potentially to its lowest levels since 2005," they said.

Meanwhile, Canadian railroads reported 70,284 carloads for the week ending Feb. 6, down 12.2 percent year over year. Their intermodal volume nudged down 0.1 percent to 50,727 units. Mexican railroads' weekly carloads decreased 1.8 percent to 14,190 units and their intermodal volume fell 11.6 percent to 8,280 units.

On a combined North American volume basis through 2014's first six weeks, 13 U.S., Canadian and Mexican railroads handled 2,115,055 carloads, down 1.6 percent, and 1,776,566 containers and trailers, up 0.4 percent compared with the same 2013 period.



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