September U.S. rail carload and intermodal volumes are mixed, reports AAR

United States September rail carload and intermodal volumes were mixed, according to data issued this week by the Association of American Railroads (AAR).

Rail carloads—at 1,119,546—were off 9.7%, or 119,909 carloads, annually. And eight of the 20 carload commodity groups tracked by the AAR were up annually, including: grain, up 25,705 carloads or 27.8%; iron & steel scrap, up 2,021 carloads or 12.2%; and grain mill products, up 1,978 carloads or 4.7%. Commodities that saw declines in September 2020 from September 2019 included: coal, down 95,400 carloads or 24.2%; crushed stone, sand & gravel, down 23,542 carloads or 20.9%; and chemicals, down 8,904 carloads or 5.6%.

When excluding coal, U.S. September carloads fell 24,509 carloads, or 2.9%, which AAR called a huge improvement compared to July and August declines of 12.7% and 9.9%, respectively. And when excluding coal and grain, they fell 50,214 carloads, or 6.7%. 

While carloads were off 9.7% annually, AAR officials said that it marks the smallest annual decline, going back to March 2020, which is when the ongoing COVID-19 pandemic initially took hold.

Average carloads per week in September—at 233,909—were off 9.7% annually, topping previous annual spreads of 17.6% in July, at 208,403, and 14.9% in August, at 224,557. AAR said that looking ahead “carload growth will largely depend on how quickly, and how much, the economy reopens.”

September U.S. intermodal containers and trailers—at 1,423,883—saw a 7.1%, or 94,351 unit increase, annually, with intermodal continuing to head back to pre-pandemic levels, driven, in large part, by rising U.S. import volumes from Asia, in advance of the holidays, with shippers restocking inventories.

This represents the fourth highest monthly tally for U.S. intermodal units, according to AAR, as well as the largest monthly percentage gain since December 2016. What’s more, total U.S. third quarter intermodal volume was up 2.9%, well ahead of the second quarter’s 12.6% annual decline. Average weekly intermodal volume—at 284,777 units—was up 7.1% annually, ahead of July’s 1.4% decrease, at 259,192, and August’s 3% annual gain, at 280,739.

“September 2020 was the fourth best intermodal month in history for U.S. railroads, as retailers and others restocked their inventories and prepared for the holiday season,” said AAR Senior Vice President John T. Gray, in a statement. “Meanwhile, rail carloads, which don’t include intermodal, remained down in September compared with last year, but showed marked improvement compared to a few months ago, especially if you exclude coal. In the meantime, railroads remain focused on keeping their employees safe while delivering the goods our nation needs.”

AAR President and CEO Ian Jefferies told LM that when looking at where the freight railroad sector was in the March, April, and early May timeframe, when annual volumes were, on average, down 25%-to-28%, railroads have made a pretty impressive comeback on the traffic front from then to now.

“Intermodal has been performing at a very high level, with the third week of September being the third-highest week of intermodal movements ever in the history of the industry,” he said. “That gives you a sense of how strong things have been on the intermodal front, and we are certainly looking for that to continue to be strong.”

And he added other areas are showing strength, too, with railroads carrying moving the majority of finished automobiles, noting that when that sector experience a shutdown over the initial months of the pandemic, that subsequently shut down that portion of rail traffic. But with automobiles back online, Jefferies explained that railroads are now moving trucks and cars again and are starting to show annual gains, for weekly comparisons.

“Agriculture and grain continue to do well, as go into a strong harvest season,” he said. “There also continue to be laggards in the energy space, and things are not exactly where we want them to be across the board. But we are certainly encouraged by the positive direction that volumes have been taking, and we will continue to do everything we can to work with our customers and communities to keep that pointed in the right direction.”

Through the first nine months of 2020, U.S. rail carloads—at 8,567,803—were off 15.3%, or 1,543,431 carloads, and intermodal units—at 10,034,360—were off 5.9%, or 623,634 containers and trailers.

For the week ending October 3, U.S. rail carloads slipped 5.9% annually, to 232,273, and intermodal units headed up 6.9%, to 286,488.