U.S. rail traffic in July continued to be higher than July 2020, but that growth appeared to be moderating.
The U.S. operations of the Class I railroads hauled 1.97 million carloads and intermodal units in July, a 3.8% increase year-over-year. While carload volumes grew 6.6% to 904,670 carloads, intermodal traffic rose by only 1.5% to 1.07 million containers and trailers, according to the Association of American Railroads.
Supply chain issues, as well as lower grain exports, contributed to the decline in year-over-year volumes, according to AAR Senior Vice President John T. Gray.
“U.S. rail traffic in July 2021 was up over July 2020, but the percentage increase was significantly lower than in other recent months, both because of more difficult comparisons and because various external factors have led to a recent deceleration in rail volumes,” Gray said.
“For example, grain exports are down sharply, taking rail carloads of grain down with them; automakers are still hampered by semiconductor shortages, leading to sharply lower rail auto volumes; and worldwide supply chain slowdowns are impacting both rail customers and railroads themselves,” he continued. “While all of these should be manageable, temporary setbacks, their convergence has resulted in weaker rail volumes than basic domestic economic factors might otherwise imply.”
While AAR data showed U.S. rail traffic growth moderating in July, second-quarter 2021 data from the Intermodal Association of North America reflects sizable year-over-year volume gains brought about by comparing this year with the COVID-19 pandemic-induced volume trough in the second quarter of 2020.
North American intermodal volumes grew by 20.4% in the second quarter, the largest double-digit quarterly increase since the third quarter of 2010, IANA said in its quarterly report. Of this total, international containers climbed 24.8%, while domestic shipments rose 15.7% and trailers grew 18.5%, IANA said.
Meanwhile, total IMC volumes also rose 29.8% in Q2, with intermodal and highway loads growing 23.9% and 33.4%, respectively, IANA said.
“Intermodal volumes have now grown for the fourth consecutive quarter. What is noteworthy is the breadth of the gains,” IANA President and CEO Joni Casey said. “With one or two exceptions, the three market segments showed positive performance in all of IANA’s 10 regions.”
The seven highest-density trade corridors, which comprise more than 60% of the total volume, all experienced double-digit percentage increases year-over-year. The trans-Canada corridor had the highest increase, at 29.6%, followed by Southeast-Southwest at 28.9%; Midwest-Northwest at 26.6%; intra-Southeast at 25.9%; South Central-Southwest, at 24.5%; Midwest-Southwest at 21.8%; and Northeast-Midwest at 20.9%.
IANA expects “solid intermodal growth” for the remainder of 2021 amid strong domestic demand and coupled with weak comparisons, the group said in its quarterly report. It expects intermodal volumes to grow by an estimated 9% in 2021. Of that, international traffic is forecast to rise by 9%, while domestic container moves are expected to grow by 6% and trailer loads anticipated to rise by 1.5% and 2.5%, the group said.
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