Dive Brief:
- Rail traffic continued its rapid pace of growth in September 2018, with the last two weeks of the month making U.S. history by transporting the most intermodal units yet, according to the Association of American Railroads (AAR).
- U.S. railroads transported 1,066,826 carloads and 1,127,385 containers last month, marking 2.6% and 6.2% higher traffic, respectively, compared to the same month last year.
- Strong traffic is a result of strong economic fundamentals, AAR Senior Vice President of Policy and Economics John Gray said in a statement. "For now, there is no indication that good economic times will end in the immediate future," he said.
Dive Insight:
A glance at the chart may suggest rail traffic is slowing. Yet, the month-to-month dip seen in September can be easily explained by seasonal trends — August is historically among the strongest months for rail traffic each year — or adverse traffic events, like flooding in the East Coast due to Hurricane Florence.
The reality is rail traffic shows no sign of slowing down since the economy remains strong.
"The many economic indicators out there are never all pointing in the same direction, but today the vast majority are saying that the U.S. economy is in a good place," the AAR wrote in its monthly rail time indicators report.
Overall, September 2018 was the fourth strongest month of rail traffic so far in the year. Adverse events aside, it held record-setting weeks for intermodal traffic and was the fifth-strongest month in terms of carload traffic.
The AAR also suggests there should be no fear of a recession any time soon. "The Conference Board's index of leading economic indicators — which is designed to turn down well before a recession starts — is at a record high," the trade group wrote in its analysis.
As CSX CEO James Foote said in a July earnings call: "[It's] a good time to be in the railroad business and it's even a better time to be in the railroad intermodal business."
