The AAR is out with one of the most unbiased and realistic looks at the current state of the economy. Bottoming out, but not recovering would be an excellent summary of AAR’s findings.
Carloads originated on U.S. freight railroads in July 2009 totaled 1,319,387, down 17.5% (280,659 carloads) from July 2008. July marked the ninth straight double-digit monthly carload decline for U.S. rail carloads, but the decline in July was smaller than in April, May, or June.
Average weekly carloads on U.S. railroads in July 2009 (263,877) were almost 4,400 carloads higher than in June 2009 and nearly 15,000 carloads higher than in May 2009. Is this proof that the carload recession is over? Not at all. But traffic is at least heading in the right direction, albeit slowly.
In July 2009, U.S. intermodal traffic (which is not included in the carload figures discussed above) totaled 922,734 trailers and containers, down 18.0% (203,061 units) compared to July 2008 (see charts at top of next page)
The weekly average intermodal count on U.S. railroads in July 2009 was 184,547 trailers and containers, down 4,200 units from June 2009 and only slightly higher than the February-May 2009 average. Thus, intermodal traffic did not have the same incremental
improvement in July 2009 that carloads had. This isn’t really surprising, given that intermodal traffic has much more of a consumer and intermodal focus than carload traffic and consumer spending is still feeble (see “Retail Sales” on page 21).
For the first seven months of 2009, U.S. rail carloadings were down 19.0% (1,854,657 carloads), while intermodal traffic was down 17.2% (1,153,208 trailers and containers).
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Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.