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US rail volumes slip 5pc in July, some blame trade war

US RAIL traffic slipped five per cent in July amid declining rail volumes for coal, grain and intermodal, reports New York's FreightWaves

US rail volumes slip 5pc in July, some blame trade war

US RAIL traffic slipped five per cent in July amid declining rail volumes for coal, grain and intermodal, reports New York's FreightWaves

14 August 2019 - 19:00

US RAIL traffic slipped five per cent in July amid declining rail volumes for coal, grain and intermodal, reports New York's FreightWaves.

US rail volumes in July totalled 2.58 million carloads and intermodal units, a 5.5 per cent drop from July 2018, the Association of American Railroads (R) said on August 7.



Of those volumes, US rail operations originated 4.8 per cent fewer carloads and 6.1 per cent fewer intermodal units compared to July 2018. July's US carload volume was 1.26 million carloads, while US intermodal container and trailer volume totalled 1.31 million intermodal units.



'Rail traffic in July, as in many other recent months, was held back by declines in three of the largest rail traffic segments - coal, grain and intermodal,' said R vice president John Gray.



'Despite a summer heat wave of historical proportions, very low prices for natural gas have seriously weakened the seasonal demand for coal-generated electrical power. These same low natural gas prices appear to have allowed chemical production to pretty much hold steady even in the face of the uncertainty around foreign trade, which has been the source of much of the recent growth in chemical production.



Year-to-date, US rail volumes fell 3.5 per cent to 16.05 million carloads and intermodal units for the first 31 weeks of 2019. On a weekly basis, US rail traffic was down 5.2 per cent to 541,558 carloads and intermodal units for the week ending August 3.



Meanwhile, overall North American rail volumes were mixed. On a year-to-date basis, North American volumes were 2.3 per cent lower than the same period in 2018, at nearly 21.9 million carloads and intermodal units.



Of that total, Canadian rail traffic was up two per cent to 4.68 million carloads and intermodal units while Mexican rail volumes fell 3.4 per cent to 1.16 million carloads and intermodal units.



But North American weekly rail volumes slumped across the board, with Canadian rail volumes down 0.6 per cent amid lower carload volumes to 156,694 carloads and intermodal units, while Mexican rail volumes slipped seven per cent to 37,904 carloads and intermodal units.



While the leaders of Class I railways reiterated plans in recent weeks to match rail capacity with demand in the second half of the year, uncertainty surrounding US trade policy direction could affect rail volumes for the consumer and manufacturing sectors.



'With 50 per cent of rail intermodal business which is overseas - including international trade, both imports of consumer and intermediate manufacturing components and exports such as food products - trade policy uncertainty continues to drag down this traffic segment. Export grain movements are also facing increasingly serious headwinds from threats to trade policy stability,' Mr Gray said.


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