Rail Traffic UP: Is the Industrial Economy Robust? [AAR Data]

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6}#fwtv_jPTQ6CJ5ke8. fwtv-panel p{margin:0 0 12px}#fwtv_jPTQ6CJ5ke8. fwtv-transcript p{margin:0 0 12px}SummaryView TranscriptNorth American rail traffic is showing surprising strength, especially when you exclude coal carloads.

Bill Stephens from Trains Magazine breaks down the latest AAR data, revealing a robust industrial economy with significant gains in metallic ores and scrap iron, despite overall flat carload growth. We also discuss the ongoing CPKC merger debate and what it means for US and Canadian rail networks. U. S. rail traffic rose 2.

5% in week 30, but the headline number understates underlying industrial strength once coal is stripped out, according to the latest Association of American Railroads data reviewed Wednesday on FreightWaves. Carloads excluding coal were up 2.

1% for the week and are running 4% ahead of last year on a year-to-date basis — a pace that Bill Stevens, editor of Trains Magazine, said closely mirrors industrial production growth. Total North American rail traffic increased 2. 5% for the week, with intermodal up 4. 3% and carloads up just 0. 5%.

That represents a deceleration from the prior four-week trend, when total North American traffic was rising at just over 4%. In the U. S. , seven of the 10 commodity groups tracked by the AAR posted gains, but carloads fell 0. 4% — compared with a four-week trend of just under positive 1% — while intermodal rose 4. 8%, below the 6.

4% pace of the prior four weeks. “The carload numbers really closely track with industrial production. And industrial production doesn’t really — it’s not a hockey stick, right?” Stevens said, noting that 4% year-to-date carload growth ex-coal represents a genuinely strong economic signal. Steel-related commodities were standout performers.

Metallic ores jumped 16% for the week, and scrap iron and steel surged 20%, both running above their prior four-week trends. Grain was up 4%, in line with its recent trend. Chemicals, typically the second-largest traffic segment, slipped 2. 2% for the week, though they remain up 2. 4% year to date.

Stevens said the dip could reflect noise in the numbers or modest softening, with oil-price volatility a potential input-cost factor. On a year-to-date basis, U. S. carloads are up 2. 7%, total units up 3. 8%, and total traffic up 3. 3% — with coal the only segment in negative territory.

The conversation also covered the proposed Union Pacific–Norfolk Southern merger, which is being held in abeyance at the Surface Transportation Board while regulators review more than 400 pages of supplemental information the two carriers filed a week ago Monday.

Stevens noted that Canadian National recently dropped its opposition after reaching a deal with Union Pacific granting CN access to St. Louis and Kansas City in exchange for UP receiving improved Chicago access over CN lines — and potential CN access to Mexico.

Whether UP and NS can secure similar agreements with remaining opponents remains an open question as the STB sets its procedural schedule.

Port of Los Angeles Executive Director Gene Seroka, who appeared on FreightWaves the prior day, expressed support for the merger, arguing that single-railroad intermodal service from the West Coast to Midwest and Northeast markets would benefit shippers routing cargo through LA.

Stevens said the deal could shift the competitive balance between East and West Coast ports, giving West Coast gateways an advantage in reaching interior markets such as Detroit, Pittsburgh, Cincinnati, and Buffalo that currently sit on the eastern side of the Class I east-west divide.

Stevens will attend the America 250 locomotive celebration later this month at the North Carolina Transportation Museum in Spencer, North Carolina, where approximately three dozen locomotives painted in red, white, and blue liveries will be on display alongside bicentennial units from 1976, including the Norfolk and Western 1776. U. S.

rail carloads ex-coal rose 2. 1% in week 30 and are up 4% year to date, with scrap iron and steel surging 20% and metallic ores up 16%. The UP-NS merger review is on hold at the STB pending analysis of 400-plus pages of supplemental filings; Canadian National dropped it