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Freight Rail Traffic Slowed Down in Third Week of March; AAR Anticipates Further Declines

March 31, 2020
A closely watched weekly leading indicator of U.S. industrial production showing some signs of stress because of COVID-19.

According to data from the American Association of Railroads (AAR), for the week ending March 21, total U.S. weekly freight rail traffic was 459,966 carloads and intermodal units, down -8.6% compared with the same week last year. Total carloads for the week ending March 21 were 224,048 carloads, down -5.4% compared with the same week in 2019, while U.S. weekly intermodal volume was 235,918 containers and trailers, down -11.4% compared to 2019.

“Demand for rail service depends on the demand further down the chain for the products railroads haul and on the ability of firms they serve to produce what is demanded,” said AAR Senior Vice President John Gray, in an AAR press release.  “Autos are a good example.  With job uncertainty and either voluntary or enforced social distancing for many people, this isn’t a great time to visit new car showrooms, so demand for autos is down.  Further, most automakers have suspended manufacturing operations for the time being.  As a result of both these factors, rail carloads of autos and auto parts fell considerably this past week.

“It wouldn’t be surprising to see rail volumes of other categories soften in the weeks ahead as steps taken to limit the spread of COVID-19 continue to impact producers, both here and abroad, particularly those of consumer goods or intermediate products from which those goods are produced,” Gray added. “The good news is that the intermodal volumes of the railroads serving the West Coast ports that receive the bulk of imports from China appear to have plateaued over the last four weeks, indicating that we may have seen the worst of the COVID-19 impacts on the Asia trade.”

For the first 12 weeks of 2020, U.S. railroads reported cumulative volume of 2,773,207 carloads, down -6.1% from the same point last year; and 2,948,362 intermodal units, down -8.1% from last year. Total combined U.S. traffic for the first 12 weeks of 2020 was 5,721,569 carloads and intermodal units, a decrease of -7.2% compared to last year.

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