U.S. carloads and intermodal loads climbed in July's first week, AAR says

U.S. railroads got off to a good traffic start in July. In the week ending July 6, their carloads increased 2 percent to 247,896 and their intermodal volume rose 1.1 percent to 205,597 units compared with the same week last year, according to the Association of American Railroads.

Total U.S. traffic for the week ratcheted up 1.6 percent as five of 10 carload commodity groups posted gains, led by petroleum and petroleum products (36.3 percent), and nonmetallic minerals and products (11.6 percent). Motor vehicles and parts traffic dipped 13.8 percent and agricultural products volume declined 7 percent.

But U.S. railroads expect better ag product outcomes in the second half as year-over-year comparisons ease due to the 2013 drought, said Robert W. Baird & Co. Inc. analysts in their weekly "Rail Flash" report.

"The World Agricultural Supply and Demand Estimates of the USDA were released recently, and corn production estimates were lowered by 55 million bushels due to lower harvested area," they wrote. "That said, current production estimates for 2013/14 would still surpass the record in 2009/10 by nearly 1 billion bushels."

Meanwhile, Canadian railroads reported weekly carloads totaling 68,361, down 7.3 percent, and intermodal volume totaling 50,860 units, up 5.1 percent year over year. Mexican railroads' carloads climbed 13.7 percent to 16,036 and their intermodal volume inched up 0.2 percent to 9,099 units.

Through 2013's first 27 weeks, 13 reporting U.S., Canadian and Mexican railroads handled 9,982,600 carloads, down 0.3 percent, and 8,144,364 containers and trailers, up 3.6 percent compared with the same 2012 period.