AAR reports annual carload and intermodal volume gains for July

United States rail carload and intermodal volumes each saw annual gains in July, according to data issued by the Association of American Railroads (AAR) this week.

Rail carloads were up 3.5%, or 35,208 carloads, to 1,048,293. Fifteen of the 20 carload commodity categories that the AAR tracks saw annual gains in July, including: : grain, up 12,066 carloads or 14.7%; petroleum & petroleum products, up 9,661 carloads or 27%; and chemicals, up 5,649 carloads or 4.6%. Commodities seeing annual declines in July included: coal, down 9,313 carloads or 2.7%; nonmetallic minerals, down 2,917 carloads or 15.6%; and metallic ores, down 592 carloads or 2.3%.

On the intermodal side, trailers and containers rose 6.9%, or 71,782 units, to 1,108,142.

“Rail traffic continues to reflect the strength of the U.S. economy across all major industry sectors, with 15 of the 20 commodity categories we track having higher carloads in July 2018 than in July 2017” said AAR Senior Vice President of Policy and Economics John T. Gray in a statement. “July saw especially strong gains in commodities related to the energy sector — and also in categories tied to consumer spending, including automotive and intermodal traffic. Still of concern, though, is the potential negative impacts that could result from the ongoing discussions around trade.”

These volume gains are in line with what Class I railroads have been recently reporting for second quarter earnings.

And things appear to be off to a strong start in the third quarter, too. Robert W. Baird & Co. analyst Ben Hartford observed in a research note that growth on a quarter-to-date basis has accelerated and been paced by gains in auto, chemical and what he called a “continued robust intermodal environment.”

The decent volume numbers speaks to a solid demand environment, which has been evident in pricing, too, but, especially, on the carload side, there has been an underlying theme that even with these volume gains, service levels have room for improvement.

For the week ending July 28, AAR reported that U.S. carloads were up 1.2% to 271,234 carloads, and intermodal units, at 287,920, increased 4.8%.