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North American Rail Volumes Still Sluggish.

Byline: FreightWaves

North American rail volumes are still lower year-over-year, but U.S. carloads recovered somewhat last week.

North American year-to-date rail volumes totaled 21.16 million carloads and intermodal units for the week ending July 27, 2.3 percent lower than the comparable period in 2018, according to the latest data from the Association of American Railroads. Of that, North American carloads were down 1.9 percent to 10.62 million carloads while North American intermodal containers and trailers were down 2.6 percent to 10.54 million.

On a weekly basis, North American volumes totaled 728,633 carloads and intermodal units for the week ending July 27. That was a 3.1 percent drop from the comparable period in 2018.

U.S. rail volumes, which represent 73 percent of North American volumes, were also lower compared to the same period in 2018. Year-to-date volumes were off 3.4 percent to 15.51 million carloads and intermodal units, while weekly volumes were down 4.4 percent to 534,498 carloads and intermodal units.

However, when comparing the most recent week (week 30) to the prior week (week 29), U.S. rail volumes were up 1.6 percent, with U.S. carloads up 2.9 percent and U.S. intermodal containers and trailers up 0.4 percent. A FreightWaves analysis points out the volume uptick. Boosting the week-on-week uptick were higher volumes for coal, farm products, motor vehicle parts and non-metallic minerals.

With the second quarter earnings season practically finished for the freight railroads and halfway over for freight transportation modes overall, one of the many lingering questions is whether rail volumes will recover in the second half of 2019.

On one hand, overall freight transportation demand could be seeing some relief in the third and fourth quarters, with the trucking market benefiting from recovering freight demand.

"In channel checks, earnings calls and market data, FreightWaves is starting to see green shoots in the freight economy suggesting that the early stages of a recovery may be beginning," starts a July 31 article by FreightWaves associate editor John Paul Hampstead.

"The most salient data point is that national tendered volumes (OTVI.USA) are now trending above 2018 at an appreciable spread for the first time this year," Hampstead wrote.

But as the trucking market benefits, the railroads may not, according to FreightWaves Market Voices expert Jim Blaze.

"Beyond rail intermodal, the carload freight sector volume is also likely to drop. A 2 percent year-over-year third quarter and fourth quarter decline in carload units seems realistic," Blaze said on July 31.

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Date:Aug 1, 2019
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