U.S. rail volumes were over 5% lower in January compared with a year ago amid persistent macroeconomic uncertainties.
U.S. freight railroads originated 2.41 million carloads and intermodal units for the first five weeks of 2020, a 5.6% drop from the same period a year ago, according to the Association of American Railroads (AAR). Of that, U.S. carloads slipped 5.9% to nearly 1.17 million carloads, while U.S. intermodal units fell 5.4% to nearly 1.25 million containers and trailers.
The lower volumes come amid continued trade uncertainties despite an initial agreement signed by the U.S. and China, as well as mixed expectations on when freight demand might rebound. However, intermodal rates are becoming increasingly competitive to truck rates.
"U.S. rail volumes fell again in January, reflecting continued softness in manufacturing and global economic weakness made worse by trade uncertainties," said AAR Senior Vice President John T. Gray.
A sizable portion of January's volume decline could be attributed to coal carloads, which fell 13.8% year-over-year to 348,532. Lower grain volumes also pulled overall rail volumes down. Grain volumes in January equaled 98,173 carloads, which was a 11.6% drop from January 2019.
Coal and grain volumes represented about 30% and 8.4%, respectively, of overall U.S. rail volumes in January.
U.S. rail carloads over the past five years are graphed in SONAR as the blue line (RTOTC.USA). Intermodal units are graphed on a relative basis to carloads. The orange line is intermodal trailers originated by the Class I railroads (RTOIT.CLASSI), and the green line is intermodal containers originated by the Class I railroads (RTOIC.CLASSI). Source: SONAR Surf/AAR
Despite the volume declines in January, a number of different commodities posted year-over-year gains. Chemicals carloads rose 2.1% to 161,567 year-to-date, while carloads of "other products" rose 3.6% to 47,467. The other products category includes waste and nonferrous scrap, as well as any other carloads that don't fit into the usual prescribed categories.
Carloads of petroleum and petroleum products also grew 1.1% to 67,014 in January.
Meanwhile, weekly U.S. rail volume was actually up compared with the same period in 2019. U.S. rail traffic for the fifth week of this year was 510,161 carloads and intermodal units, which is a 2.4% increase from the same period in 2019.
There are "glimmers of hope" in January's volumes, Gray said. Nine of the 20 carload categories had year-over-year gains in January, the most in a year, and several other commodities had carload declines in January that were less pronounced than they've been in recent months, he added.
"It's too early to say if the worst is behind us, but railroads are hopeful that 2020 will see an improved business climate and rising volumes across much of their traffic base," Gray said.