August Railcar Report

Intermodal Railcar Loadings Eclipse 2019 in August

The grind rolls on, as rail car loadings continue their Covid recovery. With new case counts trending downward and most economies in at least some stage of reopening; rail traffic has seen steady month over month increases. The obvious highlight of the August railcar report is intermodal loadings. Intermodal cars make up over 50% of total railcars moved in this country on a monthly basis. Average weekly cars loaded in August was 280,739, or 3.0% higher than August 2019. This highlight demonstrates the U.S. consumer is holding up their end of the bargain and has remained surprisingly resilient. Another factor may be an unseasonably weak U.S. dollar as Federal reserve programs and government spending have ballooned in recent months and increased the money supply. We’ll touch more on this below. Despite an out sized recovery, total YTD intermodal loadings are still -7.7% from 2019. The hole created in the pandemic depths is going to be difficult to eclipse this year. 

Moving to domestic railcar loadings, the recovery continues, but still has a long way to go. Average weekly U.S. railcar loadings, excluding coal, in August were, 163,152. A huge improvement over a May low of 138,723, but still -9.9% off last year’s August level. Coal continues to see record declines as the U.S. moves further and further from it as a power generation source. Because of the outsized relation coal has on total U.S. railcar loadings, we will focus more on ex-coal going forward. We will touch on coal loadings from time to time though. The macro economic trends seem to parallel the rail loading data, as numbers while still below 2019 levels, continue improving.

August Rail Car Loading Sector Highlights

We’ll quickly highlight two carload categories this month; Grain and crushed stone, sand, and gravel. One good, one bad.
Of the 20 Commodity categories tracked by the American Association of Railroads, only two had carload gains in August. August grain shipments averaged 22,214 car loads per week. This is an 5.6% increase over August 2019. While still down -5.9% YTD. The improvement in grain shipments is likely a due to increase in exports of grain products from the U.S. This could bode well for U.S. farmers and food producers in coming months. We’ll continue to monitor progress.
On the other end, crushed stone, sand and gravel carloads were 25% lower than August 2019. This is a direct attribute to the struggling U.S. Shale market. Just last week Saudi Arabia lowered its average oil selling price to Asia. Subsequently Oil dropped below $40 per barrel for the first time in months. With lagging jet fuel demand and slow to return travel, oil prospects do not yet see a light at the end of the tunnel.

Employment Status Deep Dive

Economic data is supporting the data seen in rail car loadings. With another upside surprise in the August BLS Job support. The U.S. created 1.371 Million net new jobs in the month of August. Lowing the reported unemployment rate to 8.4%. Expectations were for around 1 million new jobs created.  In February prior to covid shutdowns, unemployment was at or near all times lows. Going into May, we had eclipsed an unemployment rate that topped the highest levels seen during the 08 “great recession” and is only topped by the great depression of the 1930’s where unemployment reached close to 25%. so far at least, this recovery does not appear drug out like then. Since April, the U.S. Economy has made back over 10 million of the jobs lost, or a little over half the total lost jobs. Leaving us with another 10 million to go.

Another positive sign the labor market is improving is the labor force participation rate. The LFPR is the percentage of working age individuals in the U.S. actively working or seeking employment. After largely trending down with more baby boomers reaching retirement age in the 2000’s and 2010’s the LFPR had begun trending up to a 5 year high of 63.4% in January and February 2020. It proceeded to fall precipitously into covid shutdowns. In April, the labor force participation rate reached a low of 60.2%. it has since recovered to 61.7% as of August. Currently a 1% participation rate increase equates to approximately 2.6 million people returning to the work force. An improvement from 60.2 to 61.7 equates to approximately 3.9 million Americans returning to the work force.

August Economic Indicators

Other economic indicators continue to support the overall economic recovery. In August, capacity utilization eclipsed 70% for the first time since March. Manufacturing utilization continues to improve as well.
Consumer spending increased 1.9% month over month in July from June. This is the 3rd straight month of month over month increase. July was -2.8% below July 2019.
New auto sales have also continued to improve. Notching a Covid high of 15.2 million in August on a seasonally adjusted rate. April was the low at just 8.7 million new autos sold (SAAR).
Finally housing continues to be a standout. Market supply levels are at multi year lows. Interest rates remain at historic lows driving up housing demand. New housing starts in July reached an annualized level of 1.496 million. This is no more evident than in lumber prices which are currently at historic highs.

Finally we update the NY Fed’s Weekly economic index. The WEI continues to be a metric for tracking the recovery. The data has become more choppy in August, but the overall data remains in the positive direction. In August, the NY fed tracked U.S. GDP in the range of -6.15% to -4.41% over 2019 GDP levels. While a terrible number in normal years, this year is anything but normal.  

The economic recovery remains uncertain. Railspur will be here support you with Trackmobile Railcar Movers, Crane & Hoists, Compressors, and Chillers. Our engineers provide project style approached solutions to offer turn key product solutions. Contact Railspur today. 

Railspur Home

Source Credits: 

Rail Loadings: Association of American Railroads

Unemployment Data: 

Lumber Prices: LumberChart

Share on facebook
Share on google
Share on twitter
Share on linkedin
Share on pinterest

Leave a Reply

Your email address will not be published. Required fields are marked *

Recent Posts

Stock Chart

Thousand Dollar Follower

We started with an initial investment of $1,050 dollars in January 2021. We will add an additional $50 dollars each month. Follow along with our progress. 

This content is for Free and Gold members only.
Login Join Now
Read More »
Railcar Report

March Railroad Industry Report

The light at the end of the tunnel is getting brighter for the railroad industry. March total railcar loadings posted the first positive monthly gain since the pandemic began…

Read More »
Railcar loadings February 2021

February Rail Industry Report

The rail industry in the first two months of 2021 is acting much like the rail industry in 2020. Who knows what is next? January ex-coal railcar loadings were actually up 2.3% from…

Read More »