Freight Rail Traffic Plunges: Haunting Pictures of Transportation Recession

Wolf Street ^ | Wolf Richter | 4 May 2016

[Sgt_Schultze]

292 Union Pacific engines idled in Arizona Desert

Total US rail traffic in April plunged 11.8% from a year ago, the Association of American Railroads reported today. Carloads of bulk commodities such as coal, oil, grains, and chemicals plummeted 16.1% to 944,339 units.

- snip -

Only five of the 20 commodity categories saw gains. Of the decliners, coal was the biggest. But petroleum products also plunged 25%, and grain mill products dropped 7%. Even without coal, carloads were down 3% year-over-year.

[SaveFerris]

Oh, for sure.

[HamiltonJay]

We have been in a recession for 8 years+ at this point. The wheels of the cover up will fall off long before November.....

[Excellence]

Slow motion disaster.

[headstamp 2]

RECOVERY SUMMER!

[BroJoeK]

DannyTN: "Are we seeing the same drop in all freight?"

Truckers not so much.
About 70% of all US freight moves on trucks, and the trucking index set at 100 in the year 2000 hit an all-time high of 144 in February.
In March the index fell back 4.5% to 137.5.

For perspective: the US has 140,000 miles of railroad, and the industry employs around 220,000.
By contrast the US has around 4 million miles of highways and the trucking industry employs nearly 9 million or whom about 3 million are drivers.

You can be certain that in the offices of shippers everywhere there are spreadsheets calculating costs of shipping by rail versus other modes, and as prices fluctuate, shippers take advantage of opportunities to reduce their own costs.
At some point in each freight category they find a break-even mileage, where fewer miles and you're better off shipping by truck, more miles and full loads go by train.

Bottom line: despite being under 4% of all transportation miles, railroads move nearly 40% of freight ton-miles (but just 16% by tons), and that number is super-sensitive to economic fluctuations.

Major US rail lines today:

[stockpirate]

Transportation is a leading indicator for the economy. Stores stop buying wholesale products so manufacturing declines, so less is shipped via rails or trucks to produce the material needed to make whatever.

As mentioned transportation is a leading indicator, the canary in the coal mine.

[Eagles6]

2 coal plants in our couny plus a number of mines. This area on SW PA really taking it in the neck.

[IronJack]

Chicago and Kansas City are still the hubs. Those massive yards are something to behold.

I spent a lot of years in Omaha, home of the Union Pacific. Now THERE is a corporation with a colorful legacy!

[niteowl77]

These locomotive deadlines do seem to be a bit different from years past. For one thing, this is mostly big, high horsepower stuff... the days of end-cab switchers and old rebuilt 1,000 to 1,750 road switchers is long gone; the power shown in the accompanying photos was meant to move heavy and/or fast unit trains. The other thing that is a bit unusual (or so I have been told) is that these units aren't generally in bad shape, most being stored/laid-up in good order. There were a lot of seriously clapped-out units that got cut up in the 1980s and 1990s because they could not be "rebuilt" (often for the second time) in a profitable manner; these, however are generally okay though they aren't spring chickens.

One of the things that has happened over the last year or so in this area is the return of single locomotives on the head end of local trains. For decades, there would always be at least two engines MU'd back to back for two reasons: the power could travel in either direction without needing a wye or turntable, and because if one engine went down, the remaing one could finish the turn. One more sign that the transportation industry - particularly rail - is feeling the pinch.

Mr. niteowl77

[VTenigma]

I wish you guys would stop killin my buzz, Obama told me the economy was great.

[PAR35]

Interesting - looks like CSX is doing a lot better than NS in the east, with UP stronger to the northwest, and BNSF stronger to the southwest. CN isn’t looking too good to the Gulf.

[expat_panama]

whoa... Someone had told me about it recently but that foto on my 3 monitor desktop is downright sobering.

[Jimmy Valentine]

Maybe time for a resumption a passenger service?

[ilovesarah2012]

Cheer up! Unemployment is still at 5%.

[Chgogal]

Bookmark

[NonValueAdded]

♫ Benson, Arizona, blew warm wind through your hair
My body flies the galaxy, my heart longs to be there
Benson, Arizona, the same stars in the sky
But they seemed so much kinder when we watched them, you and I ♫

[HiJinx]

You’re right, if that pic is where I think it is.

There is a section of UP track along I-10 in southern Arizona that was bypassed by new rail. It is essentially a very long siding, now. And it is chock full of engines that are not in use.

[HiJinx]

Again, if that’s the string I think it is, it is about 5 miles long.

[Robwin]

Atlas Shrugged

[CedarDave]

It is, between Benson and Vail. Saw it myself a few weeks ago.