As automotive production lines restart and demand for crushed stone and sand shows steady growth—with food transportation volumes also trending positively—a chill wind blows through the U.S. rail freight market. New data from the Association of American Railroads (AAR) reveals both rail carloads and intermodal units declined year-over-year in May, casting shadows over economic recovery prospects. Is this a temporary fluctuation or evidence of deeper structural issues?
Overall Declines Mask Sectoral Divergence
The AAR reported 928,742 rail carloads in May, marking a 3.7% decrease (35,821 fewer loads) compared to 2021. Intermodal traffic fared worse, with container and trailer volumes dropping 4.3% to 1,102,558 units (49,258 fewer). These parallel declines in core metrics signal underlying economic headwinds.
Beneath the gloomy totals, seven of twenty commodity categories posted gains. Construction materials led with crushed stone/sand volumes rising 5.8% (4,659 carloads), likely tied to infrastructure projects. Automotive shipments surged 9% (4,534 carloads) as supply chains untangle, while food products grew 7.1% (1,652 carloads) reflecting stable consumer demand.
Contrasting these bright spots, grains plummeted 13.5% (13,738 carloads) amid weather disruptions and export challenges. Primary metal products collapsed 15.3% (5,878 carloads), exposing manufacturing softness, while petroleum products dropped 13.5% (5,857 carloads) amid energy market volatility.
Underlying Trends Remain Weak
Even excluding volatile commodities, adjusted metrics show persistent weakness: carloads fell 4.3% without coal and 2.8% excluding both coal and grain. "The data paints a mixed picture," acknowledged AAR Senior Vice President John T. Gray, noting automotive's gradual recovery alongside disappointing chemical and grain shipments.
Year-to-date figures reveal greater complexity: total 2022 carloads edged up 0.2% through May (8,490 more), while intermodal traffic sank 6.6% (389,799 fewer units). The week ending May 28 continued the slide with carloads down 4% and intermodal off 2.2% year-over-year.
Multiple Headwinds Challenge Recovery
Analysts cite converging pressures: global economic slowing, lingering supply chain disruptions, inflationary consumer pullbacks, and labor shortages all constrain rail performance. Geopolitical tensions and trade policy shifts further cloud the outlook.
Looking ahead, railroads face stiff challenges from trucking competition and evolving shipper demands. Industry observers emphasize infrastructure investment and operational improvements as critical responses, while urging policy support for intermodal development. The sector's ability to navigate these crosscurrents will significantly influence broader economic recovery trajectories.