The Association of American Railroads (AAR) releases its Weekly Railroad Traffic report every
Thursday morning. The report contains rail traffic data for the previous week. Weekly data are
aggregated into monthly figures in Rail Time Indicators.
Freight railroading is a “derived demand” industry: demand for rail service occurs as a result of demand elsewhere in the economy for the products railroads haul. Thus, rail traffic is a useful gauge of broader economic activity, especially of the “tangible” economy.
U.S. freight railroads originated 1,215,627 carloads in October
2011, an average of 303,907 per week, up 1.7% over October
2010, and the highest average of any month since October
What I’ve gathered from recent railroad traffic data is although the Global economy is near a tipping point because of the European Sovereign Debt Crisis, Railroad traffic remains resilient. October data for railroad traffic is always positive because many companies stock there inventory for the upcoming holiday season.
This first chart is U.S. Rail Traffic for October 2011. Notable takeaways include:
Very Negative Rail Traffic for Grain with a 14% decline from Grain Traffic in October of 2010
Strength in Petroleum Products Rail Traffic with a 19% increase in Traffic since October of 2010
Strength in Non-Metallic metals Rail Traffic with a 18% increase in Traffic since October of 2010.
This second chart is U.S. Rail Intermodal Traffic from Jan. 2006 to Oct. 2011:
Traffic was severely depressed in 2009 due to the Recession. Intermodal Traffic has fully recovered in 2011 reaching pre- 2008 levels.
The Global Economy may be having its issues but Rail Traffic remains resilient. Things can’t be as bad as they seem if Rail Traffic continues to be strong.