Watch out trucking, industrial sector has a pulse – FreightWaves

Chart of the Week: Total Rail Carloads, Chemical Rail Carloads, Motor Vehicle Rail Carloads – USA  SONAR: RTOTC.USA, RTOCH.USA, RTOMV.USA

The latest rail carload data is showing that the industrial side of the economy, which is the backbone for a large amount of freight movement in the U.S., has finally started to recover after hovering on the floor for over three months. Increasing carload volumes for raw materials like chemicals and motor vehicles are good leading indicators of future truckload volumes. This could mean an incredibly strong late third and fourth quarter for transportation providers but much tighter capacity for shippers. 

Rail carloads typically transport the building materials for mass-produced goods. The finished products are usually transported on trucks and rail containers. It is important to note that carloads are not intermodal containers or boxes that typically transport finished goods. Carloads are generally filled with bulk non-palletized items, loosely loaded in either a liquid tank or open top hopper or gondola for ease of loading and unloading at production facilities. 

Chemicals shipped on the rails are processed into anything from household cleaners to petroleum-based plastics. Total carload volumes are a barometer of the industrial sector of the economy, which is connected to energy and production. Total carload volumes include chemicals and motor vehicle parts as shown in the chart above, but it also includes items like coal, grains and petroleum products. 

Rail carload volumes were trending lower prior to the COVID-19 outbreak, showing negative year-over-year weekly comps through most of 2019. While the year-over-year numbers are still dismal at -22%, they are improving over the -30% that was the bottom in May and showing a strong upward trajectory after the Fourth of July, increasing almost 6.5%