The industry has been preparing for tariff issues for the past 9 months, which is why imports are at record levels. Trump’s policies are generally good for North American freight operators.
The most concerning thing we are watching is the Federal Government cost cuts and layoffs, which could have a much bigger drag on the economy than most assume…
This is correct. Freight volume increases (or decreases) less than GDP simply because GDP contains a lot of economic activity that doesn’t involve moving freight.
Intermodal growth is doing OK. It could be better. A significant issue is terminal location and size. i.e. winter production of fresh vegetables is centered around Yuma, AZ. There is no intermodal terminal near Yuma causing the long haul produce to move by truck.
The railroads need to figure out how to establish intermodal terminals in such places and provide good service at those points.
Sioux City, Yakima, and Russellville, Arkansas come quickly to mind.
But, if GDP is up 3%, uniformly across goods and services, each sector should grow 3%. So, intermodal should grow at same rate as GDP, faster with truckload conversion.
Of course… But it’s growth within the sector that counts and over a decade, it’s hard to believe that consumer goods wouldn’t grow relative to national income.
Intermodal should keep up with % growth in GDP - even if it is lumpy relative to the total.
How much of the consumer spending is for electronics as opposed to appliances or furniture? I don’t think that much in the way of high value electronics would go by rail.
Way more than you realize actually does. Those are imported from overseas like TV sets and such arrive in 40 foot containers model trains are normally shipped in 20 foot containers.
I don’t think so. Carload is everything other than intermodal, i.e. containers and trailers. Coal is carload. Grain is carload. Other bulk items that moves in unit trains is carload. Now railroads and others that measure business levels will divide down the broad carload into groups, like automotive, grain, coal, etc.
Anecdotally, much of carload traffic is akin to raw materials to be used to make something. Some things can go by truck, but others rail has an advantage that makes it more difficult, but not impossible, to move to truck or intermodal. Most finished consumer goods goes intermodal, not carload. Ironically, automotive is one where it’s backwards. I can’t remember seeing a carload of autoparts, except maybe tires. (To be fair, while I’m on a centrally located east-west corridor it may not be a heavy auto parts route anymore. Such has been the change where assembly factories are now located.) When I’ve been able to see a train list for an intermodal train, I’ve often seen containers of auto parts. And tires. However, finished vehicles go in a railcar.
The biggest decline in carloadings, as noted in another post, is the loss of coal traffic.
You’re measuring the wrong thing. You’re measuring dollars spent on consumer goods. You need to measure freight volume. They’re not the same thing.
For example, as a household’s wealth increases due to a growing economy, it’s unlikely that they’ll increase their consumption of wine. Instead, they’ll buy better, more expensive, wine. That would result in increased spending on consumer goods, (your graph), but it would not result in increased freight volume. The better wine would simply replace the cheaper wine in the shipments.
Being retired and having both the Baltimore and Wilmington GM Assembly plants being closed - I have no idea how much Auto Part traffic is coming to the railroads.
Back in the day Train 396 would come out of various parts plants in Michigan with generally about 100 cars split between the Baltimore and Wilmington plants. In the days of the caboose, a caboose would be placed mid-train out of Walbridge and that was the cut - Wilmington cars ahead of the caboose, Baltimore cars behind - train arrived Bayview and a yard crew would make a cut behind the mid-train caboose and the head end would depart to Wilmington while the yard crew coupled to the Baltimore cars and pull them into the yard.
Carload other than unit train traffic is in decline and has been for decades.
Most of it is small stuff lost to trucks…some of which has an intermodal ride - but that’s not where intermodal growth is coming from.
Carload that RRs want to keep are the high volume, and/or high rate traffic. Boutique stuff in particular cars. Beer, chemicals, plastic, Kaolin, steel coils, breakfast cereal, raw materials for glass… general service boxcars with attempted reloading is as good as dead.
ALL car part CAN move on rail. The questions are how does the manufacturer 's logistics handle the problem of getting the right parts to the right places at the righ time.
PSR has moved some bulk commodities that moved in irregular unit trains, ones from shippers that took days to load and assemble a train load, into the manifest network.
Greyhounds mentioning wine is appropriate. There’s a lot of wine moving in box cars from west to east. I doubt it’s the expensive stuff.
