Washington, D.C. – Against the backdrop of ongoing global supply chain challenges, the performance of U.S. rail freight has drawn significant attention. Recent data from the Association of American Railroads (AAR) reveals a complex picture: while rail carload volumes showed modest growth in the week ending August 20, intermodal freight continued to decline, signaling structural shifts in the economy and supply chain dynamics.
Carloads Gain Momentum, Driven by Coal and Grain
The latest figures show U.S. rail carloads reached 237,404 units for the week ending August 20, marking a 2.9% increase year-over-year. This figure slightly surpassed the 230,573 carloads recorded in the week ending August 6 but was marginally below the 237,857 carloads reported the prior week. Of the 10 major commodity categories tracked by AAR, seven posted annual gains, with coal, grain, and agricultural products (excluding grain) leading the expansion. This growth reflects robust demand in specific sectors and underscores rail’s critical role in meeting these needs.
Coal Demand Surges Amid Energy Market Shifts
Coal carloads totaled 68,280 units, up 4,321 year-over-year. This surge highlights coal’s persistent importance in the U.S. energy mix despite the global transition toward renewables. Factors such as rising electricity demand, higher natural gas prices, and international market fluctuations likely contributed to the uptick. Regional reliance on coal for winter heating may also play a role.
Grain Shipments Shine on Strong Harvests
Grain carloads rose to 20,974 units, up 2,825 year-over-year, reflecting both a robust U.S. harvest and sustained global demand. As a top grain exporter, U.S. production remains vital to worldwide food security. Favorable weather, advanced farming techniques, and market demand all likely fueled this growth.
Intermodal Declines Signal Broader Economic Pressures
In contrast, intermodal volumes fell to 264,144 units, down 2.4% year-over-year and below the prior two weeks’ totals. This trend suggests challenges in consumer demand and supply chain efficiency. Inflation, higher interest rates, and reduced discretionary spending may be dampening retail-related freight. Port congestion and trucking competition further strain intermodal performance.
Year-to-Date Data: Stability in Carloads, Intermodal Lags
Through the first 33 weeks of 2023, U.S. rail carloads totaled 7,606,648, nearly flat (-0.01%) compared to 2022. Intermodal volumes, however, fell 5.5% to 8,707,653 units, underscoring persistent headwinds. North American railroads (including Canada and Mexico) moved 334,389 carloads (up 2.3%) and 354,588 intermodal units (down 1.7%) for the week, with cumulative 2023 volumes down 2.8% overall.
Outlook: Adaptation Key Amid Uncertainty
The divergence highlights the economy’s uneven recovery. While traditional industries bolster carloads, intermodal faces pressure from shifting consumption and logistics bottlenecks. Rail operators may need to enhance efficiency, deepen collaboration with ports and truckers, and leverage technology to navigate these challenges. Government investment in infrastructure and rail’s environmental advantages could further support long-term growth.
About the Association of American Railroads (AAR) : The AAR advocates for safe, efficient, and sustainable rail transportation through research, policy engagement, and industry collaboration.