Rail Traffic Volumes...

In regard to traffic, I can give an observational report from my region of Texas (oil producing Permian basin).  The frenetic drilling activity for oil and gas has pulled back dramatically in our area.  However, the hundreds (thousands?) of wells drilled lay uncompleted for as much as one year.  These wells are presently being completed with fracking and casing operations which require amazing amounts of frac sand, and miles of pipe.  These commodities are keeping the rail lines active.  Hydrochloric acid is another petroleum recovery product used in enormous amounts which is transported by rail.   The resulting increase in oil and gas production has also caused an unprecedented amount of product pipelines being laid in this region.  This has additionally resulted in amazing amounts of large pipe being transported by rail to respective locations.  This type of activity has even revitalized unused lines such as the southern portion of the old KCM&O south of San Angelo, TX.   Yard capacity in Odessa, TX has been greatly expanded, NEW sidings for frac sand, pipe lay-down yards, and HCI off-loading have been created all over the region, as well as the addition of a second main track from Midland to west of Odessa.  A former branch of the ATSF between Lubbock and Seagraves, TX is very busy with these types of carloads in addition to existing agricultural loads.  A former branch of the T&P between Monahans, TX and Hobbs, NM might be seeing more traffic than it has ever seen in its existence.

I don't have statistics to offer on these operations, but the resultant number of oil field commodity trains running is easily observed.

Pretty much sums up carload traffic...

 http://www.railwayage.com/inde...-may.html?channel=50

Mike:

I attended the North American Rail Shippers conference two weeks ago and while there, discussed rail traffic volumes and the overall economy with a number of Wall Street transportation analysts.  I found they are as puzzled by our current economic situation as I was.

Historically, rail traffic has been a bellwether of the economy; if rail traffic was strong, the economy was strong.  Conversely when rail traffic began to drop off, it tended to presage an overall drop in the economy.  This was evident leading into the Great Recession in 2008.  Rail traffic volumes began to drop the latter half of 2007 and those who followed rail freight were aware we were headed for recession six months before economists and folks in government were acknowledging it.

Rail traffic numbers began falling off last year.  While some of it was certainly caused by the drop in global oil prices which resulted in a reduction in exploration and drilling activity as well as fewer crude oil trains; other areas as manufactured goods, chemical traffic, scrap steel and intermodal also were dropping and have continued to drop.  Automobile traffic was about the only rail freight segment that was growing.  When you look at this in the historical context, it should be an indication we are headed into a recession.  Yet, when you read the government's economic growth figures, job creation and national unemployment figures, it seems to indicate just the opposite - that the economy is doing ok.

Getting back to the conversations I had with the transportation analysts; their conclusion is that consumer confidence is about the only thing driving the economy right now.  If this suddenly begins to wane, the economy will fall into a recession.  Personally, I think consumer confidence will "cross the Rubicon" sometime between now and this Fall and the economy will officially move into recession.  And I further think that we must have an official recession "declared" before rail traffic numbers will begin growing again.

Curt

I think there will be an official recession called the Wednesday after the day the nation votes for its Electors for President.

Coal.  And it ain't coming back.  Just look at the increase in gas stocks... bye bye coal.  The market knows.

Just like steam locos & all those jobs that people used to do that machines now do.  Gone.

The 20th century is gone.  Progress 

juniata guy posted:

Mike:

I attended the North American Rail Shippers conference two weeks ago and while there, discussed rail traffic volumes and the overall economy with a number of Wall Street transportation analysts.  I found they are as puzzled by our current economic situation as I was.

Historically, rail traffic has been a bellwether of the economy; if rail traffic was strong, the economy was strong.  Conversely when rail traffic began to drop off, it tended to presage an overall drop in the economy.  This was evident leading into the Great Recession in 2008.  Rail traffic volumes began to drop the latter half of 2007 and those who followed rail freight were aware we were headed for recession six months before economists and folks in government were acknowledging it.

Rail traffic numbers began falling off last year.  While some of it was certainly caused by the drop in global oil prices which resulted in a reduction in exploration and drilling activity as well as fewer crude oil trains; other areas as manufactured goods, chemical traffic, scrap steel and intermodal also were dropping and have continued to drop.  Automobile traffic was about the only rail freight segment that was growing.  When you look at this in the historical context, it should be an indication we are headed into a recession.  Yet, when you read the government's economic growth figures, job creation and national unemployment figures, it seems to indicate just the opposite - that the economy is doing ok.

Getting back to the conversations I had with the transportation analysts; their conclusion is that consumer confidence is about the only thing driving the economy right now.  If this suddenly begins to wane, the economy will fall into a recession.  Personally, I think consumer confidence will "cross the Rubicon" sometime between now and this Fall and the economy will officially move into recession.  And I further think that we must have an official recession "declared" before rail traffic numbers will begin growing again.

Curt

 

Keeping partisan politics out of the discussion, I'm not at all surprised of what you say.    The election year uncertainty (closeness) is keeping the economy going sideways and the news outlets are refraining from a 2007-style barrage of gloom and doom news. 

The economy is cyclical and I'm no economist but I too believe rail traffic is the bellweather of the economy.    And I see lots of idle equipment earning per diem in these parts (as well as laid off crews). 

juniata guy posted:

 

Rail traffic numbers began falling off last year.  While some of it was certainly caused by the drop in global oil prices which resulted in a reduction in exploration and drilling activity as well as fewer crude oil trains; other areas as manufactured goods, chemical traffic, scrap steel and intermodal also were dropping and have continued to drop.  Automobile traffic was about the only rail freight segment that was growing.  When you look at this in the historical context, it should be an indication we are headed into a recession.  Yet, when you read the government's economic growth figures, job creation and national unemployment figures, it seems to indicate just the opposite - that the economy is doing ok.

 

A local (i.e. New York City) newspaper columnist has been pointing out for many years just how unreliable our unemployment figures are, and why: Ugly Jobs Report

---PCJ, adding this to recurring reports of dropping rail traffic volumes seen in Railway Age

Well we never really got out of the last recession. 

Certainly the economic picture in America and elsewhere is not positive. In reading the "official reports" , it is probably good to remember that much of the reported data is based on "surveys" rather than actual "hard counts".  Surveys use assumptions which are subject to errors for various reasons. IMHO, the most accurate data is the railroad car load count and the "initial claims for unemployment insurance" which is based on the actual claims filed.

I feel there is no "magic bullet" or "political savior" that will solve all problems in our country or the world, so we average folks should be careful with our financial life.

Tony

Up on "The D & H Bridge Line"

ALCO Fan posted:

Certainly the economic picture in America and elsewhere is not positive. In reading the "official reports" , it is probably good to remember that much of the reported data is based on "surveys" rather than actual "hard counts".  Surveys use assumptions which are subject to errors for various reasons. IMHO, the most accurate data is the railroad car load count and the "initial claims for unemployment insurance" which is based on the actual claims filed.

I feel there is no "magic bullet" or "political savior" that will solve all problems in our country or the world, so we average folks should be careful with our financial life.

Tony

Up on "The D & H Bridge Line"

 

Thus the beauty of basic census data - carloadings are part of a reported census of data and one can presume that as long as the data set is fairly complete and accurate that carloadings could be used as a "bellweather" of the economy.

AAR just released the U.S. rail carload and intermodal volume numbers for the week ending  June 4; down 17.3% year over year.  Based on the report, motor vehicles and parts are falling off now too; down over 20% on a year over year basis.  Automotive related carload traffic had been one of the few bright spots this year.  I'm guessing some of the parts related reduction may be due to auto plants curtailing 2016 vehicle production to begin changeover to 2017 model year vehicles.

Grain and miscellaneous carloads posted modest year over year increases of 2.3% and .5% respectively.

Curt