UNP Union Pacific Corp

By Colin Kellaher

North American rail traffic slid 20.2% last week, marking the third straight weekly drop of at least 20%, as fallout from the coronavirus pandemic continues to weigh on demand, data from the Association of American Railroads showed.

Carload volume tumbled 26.1% for the week ended April 25 on 12 reporting U.S., Canadian and Mexican railroads amid double-digit declines in eight of the 10 commodity groups tracked.

Intermodal traffic fell 13.9% for the week, the trade group said Wednesday.

Carloads of coal fell 37.5% last week, as the pandemic exacerbated long-term structural shifts in electricity markets.

"For most other commodities seeing big carload declines, including motor vehicles, steel, ethanol, petroleum products and more, the coronavirus clearly bears substantial blame during the last few weeks," said John Gray, AAR senior vice president. "It's reasonable to expect rail carload losses derived directly from the virus to begin their return after the crisis passes and as the economy gradually recovers."

In the week ended April 18, North American rail traffic was down 20%. For the first 17 weeks of the year, North American traffic is now down 9.2%, compared with a year-to-date drop of 8.4% reported a week earlier.

Major freight railroads are bracing for steep declines in the second quarter.

Norfolk Southern Corp. on Wednesday said its quarter-to-date volumes are down 30%, "setting up for a very soft revenue outlook," while rival Union Pacific Corp. last week said it expects second-quarter carload volumes to be down around 25%.

The AAR said U.S. rail traffic tumbled 22.4% last week, with carloads plunging 28.2% and the volume of intermodal containers and trailers down 16.5%.

U.S. rail traffic is now down 10.7% for the year to date, the AAR said, compared with a year-to-date decline of 10% reported a week earlier.

Canadian rail traffic fell 12% last week, as carloads slid 19.7% and intermodal units slipped 2.4%. Canadian rail traffic is down 5.2% for the first 17 weeks of the year.

Mexican rail traffic fell slumped 24.5% for the week, driven by a 26.1% plunge in carloads and a 22.6% drop in intermodal units. Mexican rail traffic is now down 3.6% for the year, the AAR said.

Write to Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

April 29, 2020 12:58 ET (16:58 GMT)

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