Industry Pulse: Rail industry still toeing the line of an economic rebound
- Rail intermodal and carload traffic both fell in April, marking the second consecutive decline in monthly figures this year, according to the U.S. Department of Transportation’s Bureau of Transportation Statistics’ seasonally adjusted figures, which are based on data from the Association of American Railroads.
- Intermodal shipments fell 0.43% to 1.13 million units in April, while carload shipments fell 1.51% to 1.12 million units last month.
- Compared to April 2016, however, the figures show a marked increase: carload shipments grew 9.14% and intermodal shipments were up 4.69%.
April’s data shows that while the industry is recovering from an economic trough — which began around February 2015 and hit its lowest point April 2016 — the industry’s growth is far from steady or reassuring.
Year-over-year comparisons show significant growth, but at against a historically low standard. As a result, month-over-month analyses may better indicate whether the industry is actually on an upswing. For now, the answer is uncertain. However, long-term trends in rail freight may suggest a shift in the U.S. economy following the recession to rely less on carloads and ship more intermodal cargo.
Carload shipments, which include 20 major commodities — including coal, chemicals and grain — remained far below their historic levels as of April. Meanwhile, intermodal volumes — primarily containers and truck trailers moved on rail cars — have been on a growth trend since the Great Recession, and sit far above their comparative levels a decade ago.
The unfolding trends offer a few questions. First, is the carload market set for a rebound, or has it suffered a permanent shift in shipments? Second, is the rise in intermodal shipments an indication of shippers’ preference for rail, and will this shift again due to the expansion of the Panama Canal?
Perhaps in response to this trend, ports and railroads have been investing heavily in increased intermodal infrastructure. However, the mode of transportation competes heavily against other surface modes, suffers from safety challenges and congestion, and may be soon be threatened by the rise of further transport innovations such as self-driving vehicles and truck platoons. As a result, despite high year-over-year figures, the industry is still toeing the line of an economic rebound.