The rail industry brought an early holiday gift to Wall Street – the first year over year climb in rail traffic. The AAR reported total volume was 0.3% higher than 2008’s very depressed levels while intermodal traffic surged 9.4% higher than 2008’s levels. The comparisons to 2007 provide a bit clearer picture, however, and are still showing how weak the overall economy is. Total traffic is down 11.6% compared to 2007 while intermodal is down 8.7% from 2007. This was a sharp improvement over last week’s data.
The mixed picture in freight is reflected by the huge discrepancies in various industries:
Eleven of the 19 carload freight commodity groups were up compared with the same week last year, with double-digit increases seen in metallic ores (50.9 percent), motor vehicles and equipment (28.1 percent), grain (22.8 percent), grain mill products (21.4 percent), chemicals (13.9 percent), metals (13.1 percent) and nonmetallic minerals (12.7 percent). Declines in commodity groups ranged from .1 percent for petroleum products to 31.6 percent for the miscellaneous category of all other carloads.
As we’ve expected for many months, the rail data has seen a sharp improvement, however, it’s important not to read into the 2008 comps too much. The economic stall of Q4 2008 provides very easy comps and I am a bit surprised this data did not turn sharply positive in November. Nonetheless, there is certainly improvement here albeit marginal.