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Year-to-date U.S. rail volumes continued to trend lower again for the week ending Nov. 9, with overall rail traffic slipping over 4% amid an uncertain macroeconomic environment.
The U.S. operations of the Class I railroads have originated 23.3 million carloads and intermodal units since the start of the year, a 4.4% drop when compared to the same period in 2018, according to the Association of American Railroads. Of that, U.S. carloads fell 4.3% to 11.3 carloads, while U.S. intermodal units slipped 4.6% to nearly 12 million intermodal containers and trailers.
On a weekly basis, U.S. rail volumes fell 5.9% to 515,269 carloads and intermodal units. U.S. carloads slipped 5.1% to 248,905 carloads while U.S. intermodal units tumbled 6.7% to 266,364 intermodal units.
But not all rail traffic in North America was down year-to-date. Higher Canadian intermodal volumes helped support overall Canadian traffic. Canadian rail volumes were up 0.4% year-to-date to 6.8 million carloads and intermodal units, with intermodal units rising 1.2% to 3.1 million intermodal units, while carloads fell 0.3% to 3.7 million carloads.
And while Canadian grain volumes were 1.7% lower year-to-date, at 385,861 carloads, weekly grain volumes were 10.3% higher at 9,917 carloads. The gains follow recent reports from Canadian National (NYSE: CNI) and Canadian Pacific (NYSE: CP) that both railways (CP and CN) moved record grain volumes in October.
Headwinds still present at the end of the year
Rail observers will be watching how long the lower volumes will persist into 2020. For now though, trade uncertainty could be a factor in the slump in rail volumes, particularly volumes that pass through the U.S. West Coast.
FreightWaves’ market analyst Zach Strickland reported recently that U.S. import volumes at the ports of Los Angeles and Long Beach, California, fell sharply between Oct. 21 and Nov. 2. He also said rail volumes of international containers fell by over 30% from Oct. 24 to Nov. 4 in the L.A. to Chicago lane. Domestic style containers, 48- and 53-feet, also declined 33% in the same timeframe.
While some of that decline could be attributed to shippers’ shifting preferences to the East Coast on a seasonal and cyclical basis, the data could also be pointing to diminished import activity compared with 2018, he said.
Meanwhile, FreightWaves also reported that the Port of L.A. put out a study earlier this week suggesting that tariffs the U.S. imposed over the past two years – and retaliatory tariffs that followed – threaten more than $186 billion in U.S. economic activity and could add $31 billion to $35 billion in additional costs to manufacturers and consumers.
This article first appeared on s29755.pcdn.co
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