The weather had a large effect on the results reported in the latest week and it will be several more weeks until there is clarity on clean carloading figures to draw conclusions from.
Intermodal Volumes
Intermodal volumes continued to show no sign of a peak season in the latest week with volumes trending slightly weaker on a sequential basis when they should be trending higher. One factor in the latest week that likely would have kept overall intermodal volumes at least steady sequentially is the sharp decline reported by Union Pacific.
Weather-Related Incidents
UP is coping with a bridge outage that has their Sunset route between Los Angeles, California, and El Paso, Texas, severed at West Palm Springs, California. One track opened the morning of August 23 while the second track did not reopen until August 28 and a significant traffic backlog remains that will take time for the railroad to recover from.
Hurricane Idalia hit Florida and Georgia this week, leading to several days of operational handicaps for the eastern carriers as they deal with washouts and other impacts across their systems. Norfolk Southern also had a technology outage over the last week that severely hampered operations for the better part of a day on August 28. The carrier said it could take up to two weeks to fully recover its operations. These events will make it difficult to draw meaningful conclusions over the next several weeks of data.
Railroads are under pressure to sustain present service levels and not experience too much of a drop-off in velocity or other key service metrics. The Surface Transportation Board already said it will be closely watching service coming out of Tropical Storm Hilary and that it would not hesitate to use its authority if necessary. The carriers are also approaching a December deadline for the review of enhanced service reporting measures imposed on three of the four large U.S. Class I carriers.
Carload Volumes
Carload volumes declined sequentially in the latest week on dips in grain volume and a reversal of last week’s strong increase in non-metallic minerals loadings. Most other commodity groups showed no notable deviation from existing trends so that carriers’ reversal in non-metallic minerals loadings was a key factor in the overall volume change.
