AAR: Trade war could hurt U.S. rail traffic growth

U.S. rail traffic trends last month were consistent with a healthy economy, but that trend could change if the country engages in a trade war, according to the Association of American Railroads (AAR).

U.S. railroads originated 2,240,742 carloads and intermodal units last month, a 4.2 percent increase over rail traffic in June 2017, according to an AAR press release.

The number of carloads rose 2 percent to 21,098 units, while the number of intermodal containers and trailers climbed 6.3 percent to 68,689 units compared with the same period a year ago.

Fourteen of the 20 carload commodity groups that AAR tracks on a monthly basis logged gains compared with June 2017, marking the third consecutive month in which at least 14 categories were up, said AAR Senior Vice President of Policy and Economics John Gray.

"That’s the longest such streak since late 2014," he said. "Meanwhile, record intermodal volume for June speaks to the high value proposition that rail customers associate with intermodal service. For now, things are looking good for the railroads and the economy despite the many threats, such as a potential trade war, that could bring change quickly.”

Categories that posted increases included petroleum & petroleum products, up 7,411 carloads or 19.7 percent; crushed stone, sand & gravel, up 7,276 carloads or 7.1 percent; and chemicals, up 4,608 carloads or 3.7 percent.

Commodities that logged decreases last month compared with June 2017 included coal, down 9,396 carloads or 2.7 percent; nonmetallic minerals, down 3,552 carloads or 18.8 percent; and waste and nonferrous scrap, down 618 carloads or 3.8 percent.

Excluding coal, carloads were up 30,494 carloads, or 4.3 percent, last month from June 2017. Excluding coal and grain, carloads were up 25,979 carloads, or 4.2 percent.

Total combined U.S. traffic for the first 26 weeks of 2018 was 13,900,971 carloads and intermodal units, an increase of 3.7 percent compared to last year.