Total N. American rail traffic came in at 692k cars last week (716k adjusted). The adjusted number (for decline in coal shipments ~20k/wk) easily surpasses last years 698K. The coal adjustment this week is 24k cars YOY. This will bear watching but it seems as though coal traffic is beginning to fall even more YOY than we were seeing over the summer. The weekly divergence has gone from a 18k-22k weekly change to a 22k-25k difference.
This signals even more utilities may be switching to gas to generate electricity and this will further skew the numbers. This has been a recent trend (4-5 weeks) so we’ll just keep an eye on it for now rather than declare a switch. These adjustments will be necessary because of their size until the spring of ’13 (this is when the collapse in coal traffic comps began). At that time we will have to watch both the mix of electric generation and the YOY change is total generation at the EIA. This will tell us if drops in gas or coal are due to a generation fuel mix or falling electric demand.
As for this week both “chemicals and petroleum” and “stone and related products” showed strong gains (think construction and manufacturing). Some of the chemical category is oil from the Bakken but YTD that is running just over 3k cars a week average for the first 26 weeks of ’12 so it is not a huge driver of weekly traffic yet. I expect it will be as ’13 progresses