A quick look at freight traffic via railroads indicates no surprising changes in our economic landscape. However, the numbers do reaffirm some interesting trends. Total rail freight volume for the fourth week of January 2008 was estimated at 32.4 billion ton-miles, a decrease of 1.2% from one year ago. Some of the decline is attributed to severe weather conditions early in the month, especially in the eastern states.What bears special concern in the Association of American Railroads rail freight traffic report are the few categories of freight that are showing significant reductions in rail freight loading volume when compared to 2007. Coal coke, which is used mainly as an industrial fuel showed a major decline in loading volume of 36.8%. This could be due in part to a shifting away from hydrocarbon fuels. Lumber and wood products loadings declined by a significant 22.35%, which does not bode well for the construction and furnishing trades. Primary forest product loadings dropped by 19.9% which further indicates a slow start to the coming building season.
In addition to loading volume declines, there were also some increases in loading volumes. Seven out of nineteen carload commodities showed a volume increase over week four of 2008 compared to 2007. Farm products other than grain showed a loading increase of a whopping 35.4% . This may be due in part to the ever increasing gap in cost efficiencies between rail freight and over the road long haul trucks. Grain loadings increased by 22.6%. Although the types of grains increasing in volume aren't identified, we can possibly surmise that corn is experiencing the greatest increase in rail freight volume due to ethanol production needs. Nonmetallic mineral loadings increased by 5.8%.
Cumulative volume for the first four weeks of 2008, not including trailers or shipping containers, totaled 1,246,630 carloads, an increase of 0.9 percent from 2007. An estimated total of 842,973 trailers or containers were moved by rail, which is a reduction of 4.2%. Total rail freight volume was estimated at 128.5 billion ton-miles, an increase of 1.8% from last year. To me, this indicates that more intra-continental freight is moving via rail but freight volume for distribution to and from seaports remains weak in terms of growth.
Why do we have a weak dollar?
Holiday hiring slow for retailers
Closing Bell: What sell-off? (AIG, ABK, EPR, MBI, JAVA, ORCL, ERTS)
