Dive Brief:
- The number of U.S. rail carloads declined 0.3% in February 2018 YoY at 1,028,141, while containers and trailers climbed 6.9% YoY at 1,104,001, according to the Association of American Railroads (AAR) data.
- Combined rail carloads and intermodal originations jumped 3.3% YoY to 2,132,142 in February 2018.
- Vehicle motor parts, steel and agricultural products are some of the top commodities transported by rail, so their decline in February is one reason for the decline in carloads.
Dive Insight:
AAR Senior Vice President John T. Gray said "uncertainty created by recent developments in trade policy" could have caused big rail commodities to underperform in February.
But Gray said that despite the commodity declines, February 2018 was one of the strongest months ever for intermodal transport.
"Rail carloads in February, like in many other recent months, were held back by declines in coal, grain and motor vehicles," he said in the press release. "Declines in those categories are unfortunate, but they don't reflect general weakness in the economy. Excluding them, carloads were up a reasonably solid 2.1% in February. Moreover, February 2018 was the best month ever for carloads of chemicals and the second-best month ever for intermodal."
Even though carloads are unstable, intermodal is growing, as supply chains continue to globalize and become more integrated with various modes of freight.
The ocean shipping industry feeds the rail industry, even if rail's U.S. carloads drop. For example, U.S. carload traffic dropped 2% in February 2018 YoY, but intermodal traffic increased 5%. That means an uncertain ocean shipping industry could affect the rail industry down the road.
So far, the rail industry hasn't shown any remarkable signs of growth like the trucking industry, but continues to plug along albeit with some disappointing data.
Coming from 2017, it still seems to be a "glass half full, glass half empty" kind of scenario: while NAFTA trade has remained steady for rail (at least until 2016, according to the Bureau of Transportation Statistics), intermodal provides the heft of growth for rail and carloads wobble.
