Rail/Intermodal
Carload volumes ticked down in the latest week but remain at a level neighboring the volumes of the last few months. The slow-growth trajectory for volumes this year remains steady, and the overall stability in the market supports expectations of volumes that are flat or slightly down in 2024, compared to 2023.
Stability for some sectors is a positive trend. Food products are maintaining at a high level, both historically and when compared to 2022. In other sectors, such as lumber and wood products, this stable environment represents a prolonged weakness as it continues to run underneath prior levels both year-over-year and compared to its historical average.
Grain volume took a step down underneath the five-year average in the most recent week as the U.S. grain harvest winds down. However, volumes were still much closer to the average level than they were during the extended period of weakness prior to September.
Intermodal volumes fell in seasonal fashion and continued to follow right along numbers from 2022. A continuation of this trend would mean a rapid decline in volumes as we approach the Thanksgiving holiday. Intermodal is going to continue to experience a challenging growth environment, both throughout the rest of 2023 and the first two quarters of 2024.
The question of whether carriers will be able to maintain their current service metrics remains a topic of interest. Employment has stabilized at pre-pandemic levels, and carload volumes are keeping steady. Inclement winter weather will likely be an obstacle moving forward, and with it, the normal challenges it poses to operations. Ultimately, carriers appear to be in a better position to support service levels than in the previous post-pandemic years but will remain closely monitored by regulators in case of changing circumstances.
