Rail/Intermodal
Carload volumes remained well supported this week as economically sensitive commodities remained strong at levels at or near their highs of the year. Economically sensitive volumes will need to continue growing this year and into the future if the rail sector is to grow volume.
Crushed stone, sand, and gravel have roared back in recent weeks after declining prior to the Labor Day holiday. Grain volumes also gained in the last few weeks as the harvest takes hold. The recent harvest-related rise, though, leaves grain volumes below the historical five-year average as 2023 started off below the typical low point.
Intermodal loadings have shown consistency in recent weeks as they have been able to maintain their post-Labor Day levels over the last month. This could be categorized as a very slight fall peak, but absolute volume levels are holding at weak levels below last year and well off the five-year average.
A loose truck market that is expected to persist until the peak season of 2024 likely will keep intermodal volumes muted for several quarters to come. While recently elevated diesel prices could help flush out excess capacity from the competing truckload market more quickly than presently expected, it will take time for that to work through the system and reach the intermodal market.
Reciprocal Switching Proceedings
The Surface Transportation Board this week extended the comment period on its reciprocal switching rule in response to a request from the Association of American Railroads. AAR asked the agency to grant a 90-day extension of the comment period to allow for it and other experts to further study the board’s proposed reciprocal switching rule.
The agency acknowledged that more time was appropriate, but it extended the comment period by only 15 days, pushing the comment deadline to November 7 with replies due by December 6.
Such a short extension seems to indicate STB’s desire to maintain urgency in a proceeding that has dragged on in one form or fashion for more than 12 years. The tight deadline also might signal a desire to conclude the proceeding before the terms of two board members, including chairman Martin Oberman end in the coming months.
