Production of next-generation Acela Express fleet underway
Stadler unveils TEX Rail Flirt DMU
Siemens invests in remote monitoring specialist Wi-Tronix
DB consortium selected for California high speed rail
Judge puts the skids on state’s proposed rail trail
Amtrak's CEO shares his vision for rail's future
Flight Rail: a new type of train?
America’s short lines play the long game
New York rail operator bolsters security after London bombing
In 2020, North American rail volumes could fall roughly 15% or more compared to a year ago. This projection, amidst others for deep declines in coal traffic and a shaky environment for intermodal volumes, was divulged in a report from Moody’s Investor Service, a credit ratings firm.
“Continuing declines in coal shipments will weigh heavily on the sector, while relatively stable carloads of agricultural products and more modest declines in chemicals mitigate the overall decline in freight in the sector,” said a May 7 sector comment by Moodys. Meanwhile, “soaring” unemployment could dampen consumer demand, putting intermodal volumes at risk.
Rail freight fell 22% in April year-over-year amid headwinds related to the COVID-19 pandemic. According to Moody’s estimates, the decline appears to have stabilized “tenuously” for now. The pace of how rail volumes increase is uncertain, as some areas are easing their lockdown restrictions.
“The prospect of easing lockdown measures would also indicate that freight volumes could gradually increase as the second quarter progresses,” said Moody’s. “Nevertheless, the pace of increasing rail volumes, if at all, is highly uncertain and we anticipate that rail freight volumes will remain well below last year through the fourth quarter.”
Moody’s report showed that decline in carload volumes is sharper than the drop in intermodal volumes, because carload shipments include coal volumes. Coal volumes have fallen amid lower natural gas prices and higher coal stockpiles at utilities. According to the U.S. Energy Information Administration, U.S. coal production totaled 149.8 million short tons for the first three months of 2020, compared with 179.5 million short tons in the first quarter of 2019 and 187.7 million short tons in 2018.
Last October, Moody’s said that coal production in the Powder River Basin, located in the western U.S., could fall off significantly in the coming years.
Meanwhile, the Canadian railways Canadian National (NYSE: CNI) and Canadian Pacific (NYSE: CP) haven’t experienced the same level of declines as their U.S. counterparts, because CN and CP are less exposed to thermal coal and automotive volume drops.
Intermodal volumes fall nearly 7% in the first quarter
As Moody’s calculated a 22% drop in North American rail freight volume in the first quarter, the International Association of North America (IANA) reported a 6.7% decline in intermodal volumes amid coronavirus pressures.
“The coronavirus is the obvious headwind going into Q2 [the second quarter], on top of existing trade issues, and no market segment is immune,” said IANA President and CEO Joni Casey. “We don’t know how long volumes will remain where they are, and recovery will bring its own set of challenges.”
Although domestic containers rose by 2.2% in the first quarter compared with the same period in 2019, international shipments fell 11.3%, and trailers tumbled 23.3%, according to IAN’s quarterly report released on April 30.
The Association of American Railroads has also been reporting intermodal volume declines, with North American intermodal units down 9.8% year-to-date to 5.7 million intermodal containers and trailers, according to data for the week of May 2.
IANA said the seven highest-density trade corridors, which collectively handled 63% of total volume, were down 7.7% in the first quarter. Among the largest losses were the Midwest-Northwest corridor (15.1%) and the South Central-Southwest corridor (14.7%). The remaining five corridors experienced more moderate declines, IANA said: the Midwest-Southwest corridor and the Trans-Canada corridor each slipped 7.7%; the Southeast-Southwest corridor dropped 5.4%; the Intra-Southeast corridor decreased 4.7%; and the Northeast-Midwest corridor fell 2.1% in the first quarter.
Meanwhile, IANA revealed that the volumes of combined intermodal marketing companies (IMC) rose 1.6% over the same period in 2019, while highway loads were up 2.9%, notwithstanding a 0.3% loss on intermodal.
This article first appeared on s29755.pcdn.co
About this website
Railpage version 3.10.0.0037
All logos and trademarks in this site are property of their respective owner. The comments are property of their posters, all the rest is © 2003-2021 Interactive Omnimedia Pty Ltd.
You can syndicate our news using one of the RSS feeds.