Rail traffic saw a slight uptick from government aid, but continues to show extreme weakness in the broad economy. Comps should become easier as we move into the latter portion of the year, but barring a miracle it’s safe to say that the rails are foreshadowing a very tepid recovery. AAR reports:
WASHINGTON, August 6, 2009 — The Association of American Railroads today reported 1,319,387 carloads of freight in July 2009, down 17.5 percent (280,659 carloads) compared with July 2008. U.S. intermodal rail traffic, comprising trailers and containers on flat cars not included in carload figures, totaled 922,734 units in July 2009, down 18.0 percent (203,061 trailers and containers) compared with July 2008.
For the first seven months of 2009, total U.S. rail carloadings were down 19.0 percent (1,854,657 carloads) to 7,885,039 carloads, while intermodal traffic was down 17.2 percent (1,153,208 units) to 5,569,802 trailers and containers.
All 19 major commodity categories tracked by the AAR saw carload declines in July. The biggest carload declines were coal (down 9.9 percent, or 68,879 carloads); metals and metal products (down 47.7 percent, or 29,849 carloads); metallic ores (down 58.9 percent, or 26,724 carloads); and crushed stone and gravel (down 25.8 percent, or 26,402 carloads).
“July was an interesting month,” said AAR Senior Vice President John T. Gray. “If you see the glass as half full, 14 carload commodity categories were ‘less worse off’ than they were in the first half of the year. But then you remember 15 commodity groups still saw double-digit declines relative to last year, including metals and products down 48 percent and motor vehicles down 38 percent. While the automotive performance was an improvement over recent levels, we should remember that it was supported by a billion dollars of federal assistance. When this assistance ends, it remains to be seen whether the combination of production, inventory and sales levels will continue to boost railcar loadings.”
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.