Rail/Intermodal
Total rail traffic was up 3.7% y/y for the week ended August 10, significantly stronger than last week’s comparison of 2.5% y/y, according to data compiled by the Association of American Railroads (AAR). Carload volume was down 0.2% y/y while intermodal traffic was up 7.7%.
Six out of the 10 high-level AAR commodity groups saw y/y gains in rail traffic with the most significant being grain (17.4%), farm products (excl. grain) (12.8%), and chemicals (10.0%). Of those commodities posting y/y declines the largest were coal (10.6%) and metallic ores & metals (10.5%). Both of these commodity groups have been performing poorly for most of 2024.
Intermodal traffic had another solid week as the 7.7% y/y comparison was the strongest in four weeks. U.S. carriers primarily drove the growth. The small Mexican intermodal market posted its strongest gain since the beginning of June. Canada, however, posted its fourth consecutive week of y/y declines as the potential Canadian rail strike looms.
YTD, total rail traffic is up 2.3% with carloads down 3.2% and intermodal up 8.0%. Of the 10 commodity carload groups reported by AAR, four show positive YTD y/y growth, unchanged from last week. These commodities include petroleum products (8.4%), chemicals (4.5%), grain (3.7%), and farm products (excl. grain) (0.7%).
Canadian Rail Labor Situation
There have been several developments regarding the potential Canadian rail strike. For starters, both Canadian Class I's stated that they would institute an employee lockout on August 22, which is the earliest date a work stoppage can legally begin if an agreement between them and the Teamsters union is not reached by then.
Also, Canada’s federal government denied CN’s request for intervention. The Labour Minister stated that the railroads and union have a “shared responsibility” to come to an agreement on their own. As a result of the growing uncertainty, both the Canadian and connecting U.S. railroads have begun to issue embargos on rail traffic with hazmat shipments being the highest priority.
