FREIGHT TRAFFIC: A SIGN OF NO RECOVERY?

Rail freight continues to report dismal figures despite improvement in the sequential data. The latest data showed carloads are down 10.2% vs 2008 and 18.5% vs 2007. Intermodal traffic is down 3% year over year and down 14.3% vs 2007. Despite the weakness, some industries are beginning to show some signs of relative strength.

While 12 of the 19 carload freight commodity groups were down compared with the same week last year, increases were seen in grain mill products (16.1 percent), chemicals (14.8 percent), metallic ores (14.7 percent), motor vehicles and equipment (11.2 percent), grain (8.1 percent), waste and scrap metal (6 percent) and nonmetallic minerals (2.2 percent). Declines in commodity groups ranged from .7 percent for farm products excluding grain to 24.9 percent for crushed stone, sand and gravel.

Total rail volumes year to date are down 16.8% and down 18.1% vs 2007. This far into the equity rally and the so-called economic recovery you could easily begin to make the claim that the economy is not actually recovering at all, but rather bumping along the bottom. After all, if this data is still showing year over year decline (when the economy was falling off a cliff last year) then how much better can things really be?