AAR: Carloads slip in August, but intermodal still on the upswing

Despite a 1 percent drop in total U.S. rail traffic volume for the first eight months of 2015, the Association of American Railroads (AAR) remains optimistic that the U.S. economy — and demand for rail service — will continue to grow.

U.S. railroads reported a total of 18,514,223 carloads and intermodal units through August, down 1 percent compared with the first eight months of 2014, according to the AAR. Carload traffic during the period was 9,462,936, down 4.3 percent, while intermodal containers and trailers were 9,051,287, up 2.6 percent compared with last year’s traffic for the period.

For the month of August, U.S. carload traffic slipped 4.6 percent to 1,155,957 units compared with August 2014. But, railroads logged 1,114,370 containers and trailers for the month — a 3.6 percent increase — compared with last year.

Among carload commodity categories, the August traffic numbers reflected a continuing theme: declines in coal, down 7.3 percent; petroleum and petroleum products, down 13.9 percent; and metallic ores, down 24.7 percent.

Six of the 20 commodities tracked by AAR showed gains in August compared with August 2014, including miscellaneous, up 28 percent; motor vehicles and parts, up 5.1 percent; and grain mill products, up 6.5 percent.

"August had essentially the same rail traffic pattern as the previous few months: a healthy increase for intermodal, a big decline for coal, continued weakness in a variety of energy-related commodities, and strength in some other carload segments," said AAR Senior Vice President Policy and Economics John Gray in a press release.

Gray remained upbeat for the remainder of 2015.

"Railroads are a derived-demand industry, meaning that demand for rail service is a function of demand downstream for the products railroads haul,” he said. “We're optimistic that the economy will continue to grow. Demand for rail service should continue to grow with it.”