U.S. rail carload and intermodal volumes see August gains, reports AAR’s Rail Industry Overview

United States rail carload and intermodal volumes saw mild gains in August, according to the new edition of the “Rail Industry Overview (RIO),” which was recently published by the Washington, D.C.-based Association of American Railroads (AAR).

This free publication is issued monthly by the AAR and provides insights from AAR’s economists, regarding what rail traffic is saying about the current state of the economy, as well as where things may be headed. It also features a Freight Rail Index (FRI), which AAR said “tracks movement across the most economically sensitive rail traffic commodities,” including U.S. carload commodities (excluding coal and grain) and intermodal containers and trailers.  

AAR Chief Economist Rand Ghayad told LM that the RIO essentially provides a summary of the key findings from the roughly 45 reports AAR produces for various industry stakeholders, with some of those reports geared towards those in the freight rail industry, as well as policy makers, and academics, with data and information coming from what he called a wide range of sources.

“Rail volume or rail traffic data in general is usually seen as a very important and solid indicator of what's happening in the economy,” he said. “So, if you want to know how is the economy is going to be moving over the next couple of months, one way is actually to look at what's happening in the rail industry. The whole idea of RIO is to summarize the findings from everything we're putting out there and connect the dots with what's happening in the economy. If the industry is doing well, it means the economy is on the right track. If the industry is not doing well, it means there are some concerns about how the economy is proceeding. It's meant to be very easy to digest. It's not meant to be very technical. It's not meant to be only for, rail folks. It's meant to be for everybody who's interested to know about the economy, and mostly about how rail drives the economy.”

The August FRI saw a 0.5% decline, from July to August, falling for the fourth time in the last five months, while the report noted it remains relatively strong, with the August FRI posting a higher reading less than 15% of the time.

August U.S. rail carloads, at 230,184, were up 0.7% annually, for its sixth straight month of annual gains, with 11 of the 20 carload commodity groups it tracks up annually, including grain up 1.7%, coal up 0.9%, chemicals up 1.1%, and primary metal products up 8.3%. The weekly carload average for the month, at 230,184, represents the highest for any month going back to October 2022. And on a year-to-date basis through August, U.S. rail carloads are up 2.5%, or almost 192,000 carloads, annually, at 7,749,143. 

“Despite uncertainty in the labor market and elsewhere in the economy, rail volumes continue to hold up—a not-to-be-overlooked sign of resilience in today’s supply chains,” the report stated.

August intermodal volume, at 284,316, headed up 0.5% annually, with average weekly intermodal volume, at 284,316, coming in at the highest level, for any month, going back to May 2021, as well as highest August reading since 2018. On a year-to-date basis through August, total U.S. intermodal volume, at 9.47 million units, is up 4.1%, or more than 377,000 units, marking the third-highest tally for that period, trailing 2021 and 2018, with container movements, at 9.20 million units, rising 5.2%, the highest reading on record for that period, as per AAR data.

“The outlook for intermodal, like the outlook for just about everything related to the economy right now, is unclear,” said AAR. “Intermodal volumes have generally been holding up—over the past two years, year-over-year monthly volumes have fallen just once—but the sector remains vulnerable to shifts in consumer spending, global trade flows, and policy-driven uncertainties. For railroads, that means maintaining flexibility and efficiency will be critical to navigating an unpredictable demand environment.”