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Carload and intermodal volumes turn in strong performances in July, reports AAR

United States Class I carloads were up 86,792 carloads–or 6.3 percent annually–at 1,471,811 in July, and intermodal volume was up 5.5 percent annually––or 67,524 units––at 1,286,160 containers and trailers for the highest July on the intermodal side ever recorded.

By ·
{scmr_abstract}
By ·

July volumes for the rail carload and intermodal were strong, according to data issued this week by the Association of American Railroads (AAR).

United States Class I carloads were up 86,792 carloads–or 6.3 percent annually–at 1,471,811 in July, and total carloads per week averaged 294,362 for the month, which represents the highest weekly average for July going back to 2008.

The general consensus among Class I rail carriers and industry experts is that growth is strong in various carload categories, including automotive and those related to energy production as well.

Of the 15 commodity categories tracked by the AAR, 15 saw annual gains in July, with motor vehicles and parts up 21,992 carloads or 35.9 percent, and crushed stone, sand, and gravel were up 15.9 percent or 16,690 carloads. Grain headed up 14,968 carloads––or 18.7 percent––for its ninth consecutive month of double-digit increases. Coal was down 1.7 percent or 9,464 carloads.

Intermodal continues to impress, as has been the case for several months, with July volume up 5.5 percent annually––or 67,524 units––at 1,286,160 containers and trailers for the highest July on the intermodal side ever recorded.

The intermodal gains posted by the AAR are consistent with those released earlier this week by the Intermodal Association of North America (IANA), which saw total second quarter volume—at 4,173,329—up 8.2 percent compared to the second quarter of 2013. IANA said this strong output is the highest quarterly intermodal growth rate since early 2011. And through the first two quarters of 2014, total intermodal volumes––at 7,950,783––were up 5.5 percent compared to the midpoint of 2013 and matching up with the 5.8 percent annual gain recorded during the second half of 2013.

The AAR added that the weekly intermodal average of 257,232 for the month of July “is easily the highest weekly average for any July on record.”

“Things are strong in intermodal, not only because of things moving early due to the West Coast labor talks, but because the segment is seeing underlying strength,” said FTR Senior Consultant Larry Gross in a recent interview. “The big story this year is service, or a lack of service. Almost everywhere shippers turn, they are facing capacity difficulties, cost issues, and service problems. If you look at what is going on at ports right now, it is just insane how bad it is as things to a large degree are significantly impaired. That is not a problem that gets fixed very easily, due to chassis-related things, the impact of bigger ships on operations, and related processing, which makes things very difficult. These service issues are putting pressure on shippers that may be considering moving more freight back to highways, but intermodal in a sense has propped up the volume, because highway capacity remains so tight. And because speeds are slower, the domestic container fleet has gotten less productive, which represents a constraint on capacity.”

AAR Senior Vice President John Gray observed that through the first seven months of 2014, rail and intermodal volume are in a good spot.

“The economy has had several so-called ‘false dawns’ over the past few years, but based on current rail traffic levels, there’s reason to be optimistic that this time the economy might start growing like it should,” Gray said in a statement.

For the week ending August 2, the AAR reported that U.S. carloads were up 5.6 percent annually at 304,229, and intermodal was up 6 percent at 270,323 units. And through the first 31 weeks of the year, carloads were up 31 percent at 8,920,105, and intermodal was up 5.9 percent at 7,928,600 units.


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

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