Recent data reveals a complex picture in the U.S. rail freight market, with declining carload volumes coexisting with modest growth in intermodal traffic during the week ending November 4. The Association of American Railroads (AAR) released statistics this week highlighting these divergent trends, sparking industry concerns about future freight patterns.
Declining Carloads Amid Selective Growth
U.S. railroads originated 224,415 carloads during the measured week, representing a 5.2% year-over-year decrease. This figure not only fell below the previous week's 227,575 carloads (October 28) but also showed continued deterioration from the 234,893 carloads recorded two weeks prior (October 21). Among the ten commodity categories tracked by AAR, only three showed growth while the majority experienced declines, reflecting broader economic complexities.
Commodities showing growth included:
- Motor vehicles and parts: Increased by 357 carloads to 14,841 units, marking significant expansion. This likely reflects automotive industry recovery and easing supply chain constraints as manufacturers work to meet pent-up consumer demand.
- Agricultural products (excluding grain) and foodstuffs: Grew by 274 carloads to 17,101 units, indicating stable food demand and active agricultural markets driven by sustained consumer preference for fresh produce.
- Petroleum and petroleum products: Rose by 267 carloads to 9,527 units, potentially influenced by fluctuating energy prices and anticipated seasonal demand for heating oil as winter approaches.
Commodities experiencing declines included:
- Grain: Dropped by 3,655 carloads to 21,395 units - the steepest decline - likely due to reduced export volumes and domestic demand weakness amid intensifying global grain market competition.
- Coal: Fell by 3,017 carloads to 65,298 units, continuing its long-term downward trajectory as clean energy adoption and environmental regulations diminish coal's role in energy generation.
- Nonmetallic minerals: Decreased by 2,562 carloads to 31,218 units, possibly reflecting construction sector slowdowns and reduced infrastructure investment coupled with cooling real estate markets.
Modest Intermodal Growth Amid Ongoing Challenges
In contrast to carload declines, U.S. railroads handled 260,342 intermodal containers and trailers during the week - a 1.5% year-over-year increase. However, this remains below the 271,814 units recorded on October 28 and 271,092 units on October 21, suggesting persistent market pressures.
The intermodal growth likely stems from seasonal retail inventory buildup ahead of holiday shopping periods and continued e-commerce expansion. Retailers' preparation for peak demand seasons and the structural shift toward online shopping are driving more goods through intermodal transport networks.
Year-to-Date Performance: Stable Carloads, Declining Intermodal
Cumulative data for the first 44 weeks of 2023 shows U.S. railroads originated 9,920,836 carloads, essentially flat (0.1% increase) compared to 2022. Intermodal volume totaled 10,665,407 units during the same period, representing a 7.0% year-over-year decline, underscoring ongoing challenges in this segment despite carload stability.
Market Analysis and Outlook
The U.S. rail freight market demonstrates complex bifurcation, with carload declines signaling traditional industry softness and broader economic deceleration, while intermodal growth benefits from retail seasonality and e-commerce dynamics. The year-to-date intermodal contraction may reflect supply chain realignments and shifting consumer spending patterns.
Future rail freight volumes will respond to multiple variables including global economic conditions, energy price volatility, trade policy changes, and technological innovation. Rail operators must monitor market developments closely, adapt operational strategies, and invest in infrastructure efficiency to maintain competitiveness. Diversification into specialized sectors like cold chain logistics and hazardous materials transport could present growth opportunities.
As a critical transportation mode supporting economic activity and essential services, rail freight warrants continued policy support for modernization and safety enhancements. The AAR will maintain its market monitoring program, providing regular data updates and analytical insights to help industry participants navigate evolving conditions and pursue sustainable operations.