This post first appeared on FloatingPath
Every Thursday, the Association of American Railroads reports weekly rail traffic in the U.S. They specify how much of the rail traffic was carloads and how much was intermodal.
Carload traffic is comprised mostly of bulk commodities, such as coal (46% of rail tonnage in 2001), agricultural products, and nonmetallic minerals and products, while rail intermodal transports a huge range of goods from bicycles to automotive parts, lawnmowers to glassware, greeting cards to bottled water, and toys to computers. Through globalization manufacturers supply chains have become widely distributed geographically, and rail intermodal plays a critical role in making supply chains more efficient for retailers and other firms and industries.
From the best source on the web, intermodal containers are:
A standardized reusable steel box used for the safe, efficient and secure storage and movement of materials and products within a global containerized intermodal freight transport system. “Intermodal” indicates that the container can be moved from one mode of transport to another (from ship, to rail, to truck) without unloading and reloading the contents of the container. Lengths of containers, which each have a unique ISO 6346 reporting mark, vary from 8 to 56 feet (2.438 to 17.069 m) and heights from 8 feet (2.438 m) to 9 feet 6 inches (2.896 m). There are approximately seventeen million intermodal containers in the world of varying types to suit different cargoes. Aggregate container capacity is often expressed in twenty-foot equivalent units (TEU) which is a unit of capacity equal to one standard 20 × 8 ft (6.10 × 2.44 m) (length × width) container.
Since intermodal traffic is the transportation of finished goods, and because carload traffic can be a wider variety of works in progress, intermodal is more favorable as an economic indicator.
Warren Buffett once stated on CNBC, when asked to identify the single most important economic statistic he would choose if he was stranded on a desert island for a month and could only get one set of economic numbers, that his favorite indicator was freight traffic.
In any case, this is an economic data series that is certainly worth tracking. Let’s look to the most recent numbers.
The AAR reports that intermodal rail volume for the week ending November 2 totaled 264,264 units. That is a 17.7% increase from the same week last year. We compare rail traffic year over year because the series is not seasonally adjusted and can be very volatile. Additionally, we’ll use long moving averages in our charts to better convey the trends. It’s notable that this Y/Y increase was especially high because the comparable week of 2012 was affected by Hurricane Sandy.
The 10-week moving average of intermodal rail traffic is up 6.0% year over year. That is the highest it’s been since March.