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
U.S. carload volumes in July totaled 1.04 million, down 17.6% from July 2019, while intermodal volumes slipped 1.4% to nearly 1.3 million containers and trailers. Total U.S. traffic was 2.34 million carloads and intermodal units, a 9.3% drop from July 2019.
“The old saying, ‘You have to play the hand you’re dealt’ applies to railroads,” said AAR Senior Vice President John T. Gray. “Rail traffic, like the overall economy, is generally trending in the right direction, but progress is slow. There’s a long way to go before it’s back to normal; and both week-to-week improvements and setbacks in individual commodities are to be expected. Coal and other energy-related rail commodities continue to struggle more than most, while intermodal is closer than any other rail traffic category to pre-pandemic levels.”
Of July’s volumes, coal slipped 28.7% or 110,225 carloads; crushed stone, sand and gravel fell 24.8% or 29,547 carloads; and metallic ores dropped 63.7% or 21,942 carloads.
Excluding coal, U.S. carloads in July were down by 12.7%, or 112,112 carloads.
Meanwhile, on a weekly basis, U.S. carloads volumes remained under pressure, falling 18.3% to 217,691 carloads for the week ending August 1. But intermodal traffic was only 1.8% lower to 270,277 intermodal units. Overall U.S. rail traffic slipped 9.9% to 487,968 carloads and intermodal units.
However, on a weekly sequential basis, carloads were up by 1.2% and intermodal units were up by 1.5%.
Retail trade group eyes economic data pointing to a flattening recovery
Freight rail volumes have bounced back from their lows in April and May, but the publicly traded Class I railroads, plus industry stakeholders, are cautious about how volumes will fare in the second half of the year because the outcome of the COVID-19 pandemic is uncertain.
The railroads have said that volumes will rebound in the back half of the year, but the pace of the rebound and the strength of it is unclear.
“The risks that we see going forward are increasing cases of COVID-19 and the unsettled situation with fiscal policy and the stimulus, and the impact that that could potentially have on fourth quarter volume and revenue,” said Norfolk Southern (NYSE: NSC) Chief Marketing Officer Alan Shaw during his company’s second-quarter earnings call last week.
Rail stakeholders are also questioning how market conditions will look like in the second half of this year given the uncertainty of whether the coronavirus pandemic will force another lockdown in certain areas.
“Optimism about the economy and retail spending is being tested daily with the spread of the coronavirus,” National Retail Federation (NRF) Chief Economist Jack Kleinhenz said on August 4 as part of NRF’s release of its monthly economic review. “Big questions are looming, and we are all grappling to discern what incoming data is telling us about the health of the economy and consumers. Depending on the data selected, the answers are not entirely clear.”
He continued, “A key question is whether the pace of growth and momentum will carry forward over the next few months. Based on quarterly and monthly data, the U.S. economic recovery continues despite elevated COVID-19 cases. But in examining weekly data, the pace of improvement appears to be slowing. Could it be that we are at or heading back to the same spot we were at two months ago?”
Although monthly indicators show the U.S. economy improving in May and June, July’s weekly figures seem to show a flattening recovery, NRF said. For instance, NRF pointed to the Federal Reserve Bank of New York’s Weekly Economic Index, which slipped from -6.65% on July 18 to -7.24% as of July 25 amid a decrease in retail sales. Meanwhile, for the week of July 18, weekly initial unemployment claims were up by 100,000 on a weekly basis, reversing a steady decline in claims since a peak of 6.9 million the last week of March, NRF said.
Many of the weekly reports “now suggest that the economy is moving sideways,” Kleinhenz said. “Time will tell, but the bottom line is that the economy is far from being out of the woods. The question is whether it is re-entering the woods.”
IANA: Pandemic put pressure on intermodal volumes in Q2
Meanwhile, the Intermodal Association of North America (IANA) confirmed last week that second-quarter North American intermodal volumes fell by double-digit percentage points amid the coronavirus pandemic. Lower diesel prices also fueled increased competition from trucks.
Total second-quarter intermodal volumes fell 11.9% compared with the second quarter of 2019, with international shipments slipping 15.4%, domestic containers falling 7% and trailers dropping 14%.
“Second quarter results showed the full impact of the economic downturn attributed to COVID-19. Slowing imports and declining diesel prices affected both international and domestic volumes,” said IANA President and CEO Joni Casey. “We anticipate that the second quarter drop-off should be a floor going forward.”
Seven of the highest-density trade corridors experienced lower traffic in the second quarter. Together, the corridors represented 60% of total intermodal volume, according to IANA.
The losses were as follows:
IANA also said international marketing companies’ volumes slipped 8.5% in the second quarter, of which highway loads were down 4% and intermodal was down 15.2%.
This article first appeared on www.freightwaves.com
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.