Rail Traffic Trails Behind
Total U.S. rail traffic declined across all periods (-2% MoM/ -6% YoY/ -11% YoY4). Negatively impacted by broader economic patterns, volumes reflect subdued demand for raw, intermediate, and finished goods. Broad-based weaknesses from slower consumer goods demand to lower industrial production hampered both carload and intermodal units, with the latter more so.
Carload units, solely transported by rail freight, account for roughly half of the rail traffic. Carload volumes improved on year-over-year comparisons yet remain below pre-pandemic norms (-3% MoM/ 2% YoY/ -10% YoY4). Motor vehicles and parts, along with petroleum and petroleum products, were the main contributors to the uptick. While forest products, including lumber, posed the most drag.
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Intermodal units involve at least two transportation modes and comprise the other half of rail traffic. Intermodal volumes fell across the board, pressured by softened consumer goods demand, bloated retailer inventories, and lower trade activity (-1% MoM/ -13% YoY/ -11% YoY4). Meanwhile, railroads also face higher operating costs related to a recent labor agreement. Employment is steady, but companies struggle to replace workers who leave (0% MoM/ 3% YoY/ -17% YoY4). Rail carriers will need to be responsive amidst solid competition from trucking.
?'YoY4?= comparison with April 2019