In this week’s American Association of Railroads (AAR) rail traffic update, it was once again clear that intermodal traffic was less than desired. AAR reported: “Rail intermodal volume is clearly not what it has been and could be,” said AAR Senior Vice President John T. Gray. “Keeping intermodal terminals functioning smoothly and at full capacity depends on consistent freight outflows to make room for new freight inflows. Unfortunately, due to the limited availability of downstream truck and warehouse capacity, that’s not happening right now with predictable impacts on rail intermodal volume. There is no single solution to this problem but railroads are bringing intermodal yard capacity back online to increase storage availability as well as working with customers and truckers to accelerate container pickup among other efforts. At the same time, railroads continue to see improvements in carload business with a variety of industrial goods, including steel, paper, crushed stone, and chemicals showing continued progress in September.”

As we have noted earlier, AAR reported the shipment of motor vehicles and parts remains a drag on carloads and the economy as a whole, which for the most recent week ending Oct. 2 was down 27.6% compared to the same week the prior year, and need we say 2020 was not a banner year.

However, overall carloads were up slightly (4.3%) from 2020. We certainly wish it was much higher. Unfortunately, we remain concerned regarding the headwinds our economy is facing with increased regulation and coming tax hikes, not to dismiss the impact of inflation at levels we have not seen in a very long time. Hard to think positively at this moment.