U.S. rail traffic in 2019 tumbled 5% compared with 2018 as trade uncertainty and sluggishness in the industrial economy weighed down rail volumes. A significant drop in U.S. coal volumes also contributed to the decrease.
U.S. railroads originated nearly 26.7 million carloads and intermodal units for the 12 months of 2019, a 5% drop from the same period in 2018, according to the Association of American Railroads (AAR). The data is for the year to Dec. 28.
Of that total, U.S. carloads were down 4.9% to nearly 13 million carloads, while U.S. intermodal units slipped 5.1% to 13.7 million containers and trailers.
“No question, 2019 was a challenging year for rail traffic, thanks mainly to the macroeconomy and continued years-long changes in energy markets,” said AAR Senior Vice President John T. Gray. “Trade disputes and the general economic uncertainty they spawned harmed rail-served industries much more than the overall economy.”
Besides uncertain macroeconomic conditions, a significant drop in U.S. coal carloads pulled total rail volumes lower. For 2019, coal carloads fell 9.2%, or more than 405,000 carloads, compared with 2018. They totaled 4 million carloads for the year. Coal carloads in 2019 were also their lowest in decades and 45% lower than their 2006 peak, Gray said.
Excluding the drop in U.S. coal carloads, U.S. carload traffic was down 2.8% for 2019.
And even though U.S. intermodal volumes slipped in 2019, they still represented the second-highest year for U.S. rail intermodal in history, Gray said.
“Once trade disputes are settled and operational changes aimed at improving network efficiency are fully implemented, railroads anticipate intermodal growth will return and stand ready to meet the demands of rail customers and the U.S. economy,” Gray said.
December U.S. rail volumes slipped 9.4% to 1.9 million carloads and intermodal units, with U.S. carloads down 9.2% to 928,102 carloads and U.S. intermodal units falling 9.6% to 990,934 units.
Meanwhile, overall North American rail traffic for 2019 totaled nearly 36.5 million carloads and intermodal units, a 4% drop from 2018. Of that, North American carloads fell 3.9% to 18.2 million carloads, while North American intermodal units were down 4% to 18.2 million intermodal containers and trailers.
As the rail industry looks ahead to 2020, AAR was hopeful that rail volumes would improve as trade uncertainties resolve between the U.S. and China and the U.S., Canada and Mexico. The U.S. and China in December each took steps to resolve their long trade dispute, while U.S. leaders are poised to sign an agreement that would replace the North American Free Trade Agreement, also known as NAFTA.
“With recent progress on [the U.S.-Mexico-Canada Agreement] and in the China trade talks, railroads are hopeful that these lingering issues will be resolved in 2020 and create the certainty rail customers need to invest,” Gray said.