Rail/Intermodal
Total rail traffic was up 1.9% y/y for the week ending on June 22 as strong intermodal volumes continued to offset weak carload traffic, according to data from the Association of American Railroads.
Carloads were down 1.6% y/y with only four of the 10 major commodity groups posting y/y gains. However, while only four commodity groups posted gains, coal continues to improve drastically on a w/w basis, alleviating much of the strain it has been placing on the total carload numbers. Coal shipments were up 4.2% w/w but still down 6.8% y/y.
Intermodal had another strong week, up 5.4% y/y. This number was, however, lower than the four-week average of 7.2%. Intermodal growth had been moderating through March and April but began to spike again in May and seems to now be moderating once again.
YTD, total rail traffic is up 2.0% with carloads down 3.6% and intermodal up 7.9%. Of the 10 commodity carload groups reported by the AAR, four show positive YTD y/y growth, unchanged from last week. These commodities include petroleum products (8.2%), chemicals (4.2%), motor vehicles & parts (1.9%), and grain (1.8%).
NTSB Report on East Palestine
The National Transportation Safety Board (NTSB) this week released its finalized summary of the East Palestine derailment that occurred in February 2023. year. NTSB confirmed that an overheated wheel bearing was the primary cause of the derailment and recommended that the Federal Railroad Administration establish new and tighter rules on defect detection and operational response.
In response to the NTSB report, the AAR highlighted the railroad industry’s alignment with NTSB and steps that the industry has already begun to take in the wake of the disaster.
Norfolk Southern also issued a response emphasizing its general alignment with NTSB and the steps taken since the derailment. The company did, however, stand by its decision to “vent and burn” the vinyl chloride inside the derailed railcars in order to avoid a catastrophic explosion – a step that the NTSB deemed as unnecessary.
Also reported this week, a CN train derailed near Chicago, causing alarm to the local community due to the chemical contents of the railcars. However, after an initial investigation, the local mayor announced that there was “no danger to the public.”
