While stock markets serve as economic barometers, rail freight volumes may represent the pulse of the real economy. Recent data from the American Association of Railroads (AAR) reveals encouraging growth in US rail freight, suggesting potential momentum for economic recovery.
Overall Freight Volume Overview
For the week ending September 24, US rail freight volume reached 305,133 carloads, marking a 1.1% year-over-year increase . This figure approaches the 305,905 carloads recorded during the week of April 2, representing the highest weekly volume since late 2008. The data shows an accelerating trend, with the latest numbers surpassing the previous three weeks' volumes of 299,914, 299,943, and 300,521 carloads respectively.
Regionally, eastern US railroads saw a 2.9% increase while western railroads grew by 3.8%, indicating nationwide growth in freight demand.
Year-to-Date Performance
Cumulative rail freight volume through September 24 totaled 11,016,908 carloads, up 1.7% year-over-year . While this growth appears moderate, it represents a positive signal given current global economic complexities, demonstrating steady recovery in the US rail freight sector.
Strong Intermodal Performance
Intermodal transport (containers and trailers) showed particularly robust growth, reaching 248,402 units for the week ending September 24 – a 3% year-over-year increase . This marks the highest weekly total since 2011 and the strongest performance since week 39 of 2007, reflecting surging demand for containerized transport.
Year-to-date intermodal volume reached 8,630,362 units, up 5.5% compared to the same period last year. This significant growth indicates shippers are increasingly choosing rail intermodal as a cost-effective alternative to truck transport.
Key Advantages of Rail Intermodal
The primary driver for choosing rail intermodal remains fuel cost savings. While rail transport typically takes longer than trucking, the substantial fuel cost advantages often outweigh time disadvantages. With persistently high oil prices, rail intermodal's cost benefits have become particularly attractive to shippers.
Commodity Breakdown
Among the 20 commodity categories tracked by AAR, 13 showed year-over-year growth. Metal ores led with 21% growth , while grain shipments declined by 21.4%, potentially reflecting agricultural production patterns or shifting market demands.
Outlook
The recent rail freight growth reflects both economic recovery and shippers' growing preference for rail transport. The strong intermodal performance particularly underscores this trend. However, varying performance across commodity categories reminds us that multiple factors influence rail freight markets, requiring close monitoring and strategic adjustments to meet evolving demands.
As economic recovery continues and rail transport efficiency improves, the US rail freight sector appears positioned for expanded growth opportunities in coming quarters.