Week 18 of 2016 shows same week total rail traffic (from same week one year ago) declined according to the Association of American Railroads (AAR) traffic data. Rolling averages continue moving deeper into contraction.

The deceleration in the rail rolling averages began one year ago, and now rail movements are being compared against weaker 2015 data – and it continues to decline. There were port labor issues one year ago which affected intermodal movements – which skew the results both positively and negatively (this week again negatively as it is being compared to the shipping surge at the end of the strike). HOWEVER, one can ignore the strike which only affects intermodal – and concentrate on carloads – the data is very soft. We are now at the very end of the strike impact.

This analysis is looking for clues in the rail data to show the direction of economic activity – and is not necessarily looking for clues of profitability of the railroads. The weekly data is fairly noisy, and the best way to view it is to look at the rolling averages (carloads and intermodal combined).

  Percent current rolling average is larger than the rolling average of one year ago Current quantities accelerating or decelerating Current rolling average accelerating or decelerating compared to the rolling average one year ago 4 week rolling average -10.6% accelerating accelerating 13 week rolling average -8.7 % decelerating decelerating 52 week rolling average -5.5 % decelerating decelerating

A summary of the data from the AAR:

The Association of American Railroads (AAR) today reported U.S. rail traffic for the week ending May. 7, 2016.

For this week, total U.S. weekly rail traffic was 492,923 carloads and intermodal units, down 10.6 percent compared with the same week last year.

Total carloads for the week ending May. 7 were 233,047 carloads, down 14.8 percent compared with the same week in 2015, while U.S. weekly intermodal volume was 259,876 containers and trailers, down 6.4 percent compared to 2015.

Three of the 10 carload commodity groups posted an increase compared with the same week in 2015. They were miscellaneous carloads, up 6.7 percent to 9,839 carloads; chemicals, up 1.6 percent to 31,075 carloads; and grain, up 0.1 percent to 18,004 carloads. Commodity groups that posted decreases compared with the same week in 2015 included coal, down 33.5 percent to 62,394 carloads; petroleum and petroleum products, down 26.4 percent to 11,394 carloads; and metallic ores and metals, down 12.8 percent to 20,569 carloads.

For the first 18 weeks of 2016, U.S. railroads reported cumulative volume of 4,320,667 carloads, down 14.3 percent from the same point last year; and 4,628,008 intermodal units, down 1.1 percent from last year. Total combined U.S. traffic for the first 18 weeks of 2016 was 8,948,675 carloads and intermodal units, a decrease of 8 percent compared to last year.