The Association of American Railroads has reported on U.S. Rail freight traffic for week 4, ending January 30, 2021. The data clearly shows weakness as compared to the same week last year: Total carloads down 4.1% and total traffic up 2.1%. However, those statistics mask what is happening in our economy.
Within the carload category, grain shipments were up 43.4%, a whopping amount. Grain exports help the farmers and railroads, but that is not much of an indicator of the strength of our economy.
The only other two categories of rail carload increases were chemicals (up 3.0%) and Farm products, excluding Grain, and food (up to .6%). The hardest hit overall appears to be the energy sector, counting coal and petroleum and petroleum products), but other industrial categories were also hit badly.
And, how was total traffic up 2.1% if carloads were down? Intermodal units were up 7.6%. Clearly, the U.S. industrial economy has been hammered by the pandemic recession and has yet to recover by a wide margin. We will keep watching but are very concerned that the now-launched war on the energy sector will further cut rail traffic and opportunities for industrial growth.
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