U.S. rail traffic slump continued in May

(Source: Progressive Railroading 06/06/2019)

Several factors contributed to the 4.1 percent decline in U.S. railroads’ combined traffic volume last month compared with May 2018, the Association of American Railroads (AAR) reported yesterday.

U.S. carload traffic fell 2.1 percent to 1,291,671 units, while intermodal volume dropped 5.9 percent to 1,315,684 containers and trailers in May versus a year ago, according to AAR data. Combined, U.S.railroads logged 2,607,355 carloads and intermodal units, down 110,586 units.

AAR Senior Vice President of Policy and Economics John Gray attributed the traffic decline to several factors, including flooding in the Midwest that has hindered railroads’ operations and that of their customers for months.

“More important is heightened economic uncertainty that’s being made worse by increased trade-related tensions; higher tariffs leading to reductions or disruptions of international trade, and lower industrial output,” said Gray in a press release. “In addition, some rail markets are undergoing rapid change.”

For example, locally sourced frac sand in Texas has displaced sand that used to be shipped in by rail, Gray said.

“Just by themselves, these reduced sand movements are having a material negative impact on total rail carloads,” he added.

Six of the 20 carload commodity categories that AAR tracks each month posted carload gains last month compared with May 2018. They included petroleum and petroleum products, up 13,513 carloads or 25.9 percent; chemicals, up 2,630 carloads or 1.6 percent; and nonmetallic minerals, up 2,534 carloads or 12.4 percent.

Commodities that logged decreases included crushed stone, sand & gravel, down 20,358 carloads or 14.6 percent; grain, down 6,830 carloads or 5.7 percent; and primary metal products, down 3,117 carloads or 6.4 percent.

Excluding coal, carloads were down 26,417 carloads, or 2.9 percent, last month versus a year ago. Excluding coal and grain, carloads were down 19,587 carloads, or 2.4 percent.

Total U.S. carload traffic for the first five months of the year was 5,528,824 carloads, down 2.4 percent compared with the same period a year ago; and 5,848,287 intermodal units, down 2.4 percent.