The latest data from the Association of American Railroads (AAR) reveals concerning trends in US rail freight volumes, serving as a potential early warning for economic headwinds. For the week ending July 16, both carload and intermodal freight showed year-over-year declines, continuing a pattern observed throughout 2022.
Carload Freight: Mixed Performance Across Commodities
Total US rail carload freight reached 229,809 units for the week, representing a 2.4% decrease compared to the same period last year. While showing improvement from the previous week's 207,450 units, this remains below the 234,561 units recorded two weeks prior, indicating ongoing volatility.
The AAR's ten major commodity categories presented a mixed picture:
- Growth sectors: Non-metallic minerals (+2,211 units to 33,017), agricultural products excluding grain (+1,099 to 16,695), and motor vehicles/parts (+867 to 12,916) showed positive momentum, likely reflecting construction activity, stable food demand, and automotive sector recovery.
- Declining sectors: Coal (-3,545 to 65,634), miscellaneous freight (-2,295 to 8,496), and grain (-2,265 to 18,752) experienced significant drops, potentially signaling energy transition, reduced consumer spending, and global agricultural market shifts.
Intermodal Traffic Continues Downward Trend
Intermodal container and trailer volume totaled 269,090 units for the week, marking a 3.2% year-over-year decline. Similar to carload freight, this represented improvement from the prior week's 230,150 units but remained below the 265,724 units recorded earlier in July.
The intermodal decrease may reflect easing port congestion and improved trucking capacity, allowing some freight to shift transportation modes. Consumer demand patterns and inventory adjustments also likely contributed to the decline.
Year-to-Date Performance Shows Broader Concerns
Cumulative data for the first 28 weeks of 2022 paints a more concerning picture:
- Carload freight: 6,431,176 units (-0.3% year-over-year)
- Intermodal volume: 7,377,966 units (-6% year-over-year)
The steeper decline in intermodal traffic suggests particular weakness in consumer goods movement and potential inventory corrections following pandemic-era supply chain disruptions.
Economic Implications and Outlook
Rail freight metrics serve as reliable leading indicators of economic activity. The current downward trends warrant attention but require contextual analysis alongside other economic data points including GDP growth, employment figures, and inflation metrics.
Structural factors including energy transition, supply chain realignment, and geopolitical uncertainty may be creating lasting impacts on freight patterns. The coal sector's decline appears particularly indicative of broader energy market transformations.
While not conclusive evidence of economic contraction, these rail freight trends suggest moderating economic momentum. Continued monitoring of transportation data will be essential for assessing whether these patterns represent temporary adjustments or more fundamental economic shifts.