Report from Association of American Railroads
There is a reason I am paying so much attention to any news from the transportation sector. The data they report is the closest thing you can get to the real time health of the economy and it's not looking pretty. We all knew December was a terrible month but the first two weeks of January are not looking any better so far and things seem to be actually deteriorating from what I can see... Volumes are down roughly 16.8% year over year in January. And while some of the deterioration could be attributed to shift from rail to trucking because of lower diesel prices the adjustments are probably minor in the grand scheme of things.
To sum it up- it's not looking pretty...
January numbers
WASHINGTON, January 22, 2009 -- The economic slowdown continued to affect U.S. railroads as freight volume declined during the second week of 2009 in comparison with same week last year, the Association of American Railroads (AAR) reported today.Carload freight totaled 267,063 cars, down 17.9 percent from 2008, with loadings down 13.2 percent in the West and 24.4 percent in the East. Intermodal volume of 199,117 trailers or containers was off 13.7 percent from last year, with container volume falling 10.2 percent and trailer volume dipping 27.0 percent. Total volume was estimated at 28.3 billion ton-miles, off 16.8 percent from 2008.
All nineteen carload commodity groups were off last week in comparison with last year."
Selected highlights from December 2008...
"In December 2008, U.S. rail carloads were down 14.2 percent (214,680 carloads) from 2007 to 1,298,233, while intermodal originations totaled 890,133, down 13.7 percent (141,045 units) from the same period a year ago.
"It's not surprising that U.S. rail traffic in December and the fourth quarter was down so much -- we all know that the economy is in a world of hurt right now," said AAR Senior Vice President John T. Gray. "That said, railroads' long term future remains bright. Railroads are the best value in transportation and they're environmentally responsible. Moreover, the financial strength and staying power they've developed since the balanced regulation of the Staggers Act was instituted ensures that railroads will be here next week, next year, and 20 years and more from now. When the economy turns around -- and it will -- railroads will be ready and America will be well served."
In December, coal was again the lone bright spot for U.S. railroads, with originations up 0.7 percent (4,848 carloads) for the month to 673,002 carloads. The 7.5 million carloads of coal U.S. railroads originated in 2008 (up 3.5 percent, or 250,850 carloads, over 2007) accounted for 45 percent of total U.S. non-intermodal carloads. Carloads of grain rose 3.1 percent (36,545 carloads) in 2008 over 2007.
Commodities showing significant declines in U.S. carloadings in December included chemicals (down 31,616 carloads, or 21.8 percent), motor vehicles and equipment (down 31,597 carloads, or 39.8 percent), and metals and metal products (down 26,925 carloads, or 44.9 percent)."
One interesting note though is that while Canada is deteriorating as fast as the US, volumes in Mexico are holding up somewhat better. Go figure...
