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Intermodal, chemicals and grain boost US rail traffic in January

Record intermodal and chemicals volumes as well as higher grain volumes boosted overall U.S. rail traffic in January, according to data from the Association of American Railroads (AAR).


January intermodal traffic rose 12.1% year-over-year to 1.17 million containers and trailers, according to AAR. Chemicals carloads increased by 4.4% or 5,717 carloads, while grain carloads shipped increased by 31,434 from a year ago. That’s a 40% increase year-over-year.


However, despite the increased volumes for chemicals and grains carloads, overall January carloads were down 2.1% to 930,303 carloads amid a 12.7% decrease in coal carloads, an 18.9% decline in carloads of crushed stone, sand and gravel, and a 12.1% drop in carloads of petroleum and petroleum products.


Combined U.S. carload and intermodal traffic in January totaled 2.1 million, up 5.3% from last year.


“We are encouraged by rail volumes in January. U.S. intermodal shipments and carloads of chemicals set new records; grain had its biggest-ever year-over-year increase; total carloads were the highest they’ve been in a year; and carloads excluding coal actually grew year-over-year for the second straight month,” AAR Senior Vice President John T. Gray said in a release. He was referring to the calculation that U.S. carloads excluding coal were up by 2.3% in January.


“To be sure, the economy remains under strain with a good deal of uncertainty, but we’re cautiously optimistic about the future. Railroads are well prepared to support a strong recovery whenever it occurs,” Gray said.


Indeed, higher intermodal traffic in January could set the pace for volumes for the first quarter of 2021. The intermodal spot market to and from West Coast ports allude to anticipated tight capacity, while 40 container ships were in San Pedro Bay waiting to dock as of earlier this week. Several Class I railroads during their fourth-quarter earnings calls were also optimistic about intermodal traffic in the first quarter.


Canadian grain volumes were also higher in January


While U.S. grain volumes were up by 40% year-over-year in January, they were also higher for Canadian railway CN(NYSE: CNI), which said this week that January marked the 11th consecutive month in which it experienced a monthly grain record.


The railway shipped over 2.95 million metric tonnes (MMT) of Canadian grain and processed grain products via carloads in January, beating by 27% a previous January record of 2.33 MMT set in 2019. January 2021’s figure was also 32% higher than the three-year average of 2.24 MMT.


Since the 2020-21 crop started Aug. 1, CN has shipped over 17.5 MMT of grain volumes via carload, which is 24% higher than the three-year average of 14.1 MMT and 17% higher than the record of 14.9 MMT set in 2018-19, the railway said.


CN also said it is “breaking records” from shipping over 600,000 metric tonnes of western Canadian grain via container and shipping volumes from eastern Canada.


CN attributed the volume increases to successful collaboration with producers and partners, as well as to over $10 billion in investments to track infrastructure and associated assets, including the acquisition of over 2,500 high-capacity grain hopper cars.

“What great news to start off 2021. I could not be prouder to see such fluidity and collaboration across all supply chains at the same time, especially in Canadian grain. We know that harsher weather is always just around the corner, so it is critical that we keep up the pace and collaboration that we have seen in the first half of the crop year to keep goods moving,” said CN Chief Operating Officer Rob Reilly.


This article originally appeared on Freight Waves

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