Washington, D.C. – The U.S. rail freight industry has reported robust growth in July, according to new data from the Association of American Railroads (AAR), providing encouraging signs of economic resilience amid global challenges.
Total Freight Volume Surges
U.S. Class I railroads transported 1,471,811 carloads in July, marking a 6.3% year-over-year increase (86,792 additional carloads). The weekly average of 294,362 carloads represents the highest July volume since 2008.
"These encouraging numbers suggest the economy is gradually recovering," said AAR President and CEO Ian Jefferies. "Rail freight serves as an economic barometer, and this strong performance indicates increased economic activity in coming months."
Intermodal Sets New Records
Intermodal traffic reached 1,286,160 containers and trailers in July, up 5.5% (67,524 units) year-over-year, setting a new July record. The Intermodal Association of North America reported Q2 2023 volume grew 8.2% to 4,173,329 units – the strongest quarterly growth since early 2011.
"Intermodal's sustained growth reflects shippers' demand for efficient, reliable and sustainable transportation," Jefferies noted. "Rail offers clear advantages in reducing congestion, lowering emissions and improving supply chain efficiency."
Sector Highlights Show Broad-Based Growth
All 15 commodity categories tracked by AAR showed year-over-year gains:
- Motor vehicles & parts: Up 35.9% (21,992 carloads), reflecting automotive industry recovery and increased consumer confidence.
- Construction materials: Crushed stone, sand and gravel rose 15.9% (16,690 carloads), driven by infrastructure investments.
- Grain: Increased 18.7% (14,968 carloads), marking nine consecutive months of double-digit growth due to strong agricultural output.
- Coal: The only declining category, down 1.7% (9,464 carloads), signaling ongoing energy transition trends.
Economic Implications
AAR Senior Vice President John Gray observed that rail and intermodal volumes through July have performed well. "While we've seen several false economic dawns in recent years, current freight levels suggest this recovery may have staying power," Gray said.
For the week ending August 2, U.S. freight volume grew 5.6% to 304,229 carloads, while intermodal rose 6% to 270,323 units. Year-to-date figures show 3.1% growth in carloads (8,920,105) and 5.9% in intermodal units (7,928,600).
Industry Challenges and Opportunities
The rail sector faces several challenges:
- Aging infrastructure requiring significant upgrades
- Workforce shortages across operations
- Competition from other transportation modes
However, industry leaders point to opportunities in:
- Digital transformation and automation technologies
- Sustainable operations and cleaner fuels
- Expanded intermodal solutions
FTR transportation analyst Larry Gross noted current logistics constraints – including port congestion, chassis shortages and mega-vessel impacts – continue to make intermodal an attractive option despite some shippers considering a return to trucking.
Future Outlook
The rail industry is positioned to play an increasingly vital role in America's economic recovery through:
- Modernized infrastructure investments
- Enhanced operational efficiency
- Strategic intermodal partnerships
- Workforce development initiatives
As the economy continues its recovery trajectory, rail freight volumes are expected to maintain their growth momentum, serving as both a driver and indicator of broader economic health.