As global supply chains continue to face challenges, rail transportation—a critical link—remains a key indicator of industrial health. Recent data from the Association of American Railroads (AAR) reveals a complex picture of the U.S. freight market for the week ending July 23, with carload volumes showing modest growth while intermodal (container) traffic declines. This divergence raises questions about its implications for future logistics patterns.
North American Rail Volumes Decline Overall
At the macro level, North American rail traffic (including the U.S., Canada, and Mexico) showed year-over-year declines. For the week ending July 23, total carloads reached 328,063, down 0.4%, while intermodal units fell 2.4% to 352,928. Combined, North American rail volume stood at 680,991 carloads and intermodal units, a 1.4% decrease.
Year-to-date data through 29 weeks shows North American rail volume at 19,533,345 carloads and intermodal units, down 3.3%. These figures suggest persistent downward pressure despite pockets of resilience in specific sectors.
U.S. Rail Freight: Carloads Edge Up as Intermodal Slips
Focusing on the U.S. market, AAR data indicates carload traffic reached 232,565 for the week, up 1.1% year-over-year. This marks an improvement from the prior two weeks (229,809 on July 16 and 207,450 on July 9), suggesting gradual recovery.
However, intermodal traffic told a different story, declining 2.5% to 266,366 units. While higher than the July 9 figure (230,150), it remained below the July 16 level (269,090), reflecting volatility amid a broader downtrend.
Year-to-date U.S. carloads were nearly flat (-0.2%) at 6,663,741, while intermodal volume dropped 5.9% to 7,644,302 units, highlighting the growing divergence between the two segments.
Drivers of Carload Growth: Commodity Breakdown
Three of the 10 commodity categories tracked by AAR posted gains:
- Motor vehicles & parts: Up 1,790 carloads (12,559 total), likely reflecting auto manufacturing recovery and stronger parts demand.
- Coal: Increased 1,772 carloads (67,719 total), potentially tied to energy market shifts, higher natural gas prices, and global coal trade dynamics.
- Agricultural products (ex-grain) & food: Rose 950 carloads (15,627 total), indicating stable food demand and export activity.
Declining Commodity Categories: Warning Signs
Notable carload decreases appeared in:
- Metallic ores & metals: Down 1,516 carloads (21,601 total), possibly signaling weaker global industrial demand.
- Petroleum products: Fell 490 carloads (10,038 total), likely influenced by oil price volatility and refining adjustments.
Intermodal Weakness: Multiple Factors at Play
The intermodal decline stems from several pressures:
- Persistent (though easing) port congestion
- Ongoing rail and port labor shortages
- Slowing consumer demand amid inflation
- Global supply chain disruptions
Outlook: Continued Divergence Likely
The split trends reflect broader economic crosscurrents. While carload growth remains tied to specific industries, intermodal faces structural headwinds. Businesses relying heavily on container shipping may need contingency plans, including alternative transport modes or inventory adjustments.
The rail sector must address efficiency challenges through infrastructure upgrades, workforce development, and stronger intermodal coordination to meet evolving logistics demands.