Dive Brief:

• November 2017 rail traffic data revealed a glass half empty, half full for the railroad industry, according to the Association of American Railraods.
• Railroads transported 1,307,521 carloads in November 2017, or 0.9% fewer than the same month last year. Meanwhile, intermodal traffic rose 3.8% as railroads transported 1,369,160 containers and trailers last month.
• The glass is half empty because carloads continue their decline, which means less business for railroads. But, it's at least half full because the commodities behind the decline "don't have much to do with the state of the economy" according to AAR Senior Vice President John Gray.

Dive Insight:

The glass half empty, half full analogy reveals the degree by which the rail industry's fortunes are tied to the economy at large — and how successfully the industry has diversified to compete with other modes of surface transportation.

The AAR points to the nature of certain commodities to explain falling volumes. Coal, grain and petroleum or petroleum products fell on a year-over-year basis last month, but these commodities are heavily influenced by the global economy. Meanwhile, the commodities that grew support booming domestic industries, including crushed stone, sand & gravel for construction (up 14.8% YoY), metallic ores for steel (up 22.8%) and chemicals (up 3.6%).

For now, the rise of intermodal traffic is keeping the industry afloat. But lower nationwide taxes, expanding terminals and handling capacity at U.S. ports and new regulations on the competing trucking industry promise to boost profits in 2018.

The decline of carloads may be troublesome for the rail industry, as it knocks out a key source of revenue, but railroads can see the light at the end of a tunnel, leading to a healthy 2018. If only the economy would help coal, grain and petroleum shipments rise too, it could even be a record year for the industry.