By Colin Kellaher

 

North American rail traffic fell 2% last week, wrapping up a month of declines marked by supply-chain constraints, data from the Association of American Railroads showed.

Carload volume rose 2.9% for the week ended Oct. 2 on 12 reporting U.S., Canadian and Mexican railroads, while intermodal traffic fell 6.3%, the trade group said Wednesday.

In the week ended Sept. 25, North American rail traffic fell 1.9%. For the first 39 weeks of the year, North American rail traffic is up 7.9%, compared with a year-to-date gain of 8.2% reported a week earlier.

"Rail intermodal volume is clearly not what it has been and could be," said John Gray, AAR senior vice president. "Keeping intermodal terminals functioning smoothly and at full capacity depends on consistent freight outflows to make room for new freight inflows. Unfortunately, due to limited availability of downstream truck and warehouse capacity, that's not happening right now, with predictable impacts on rail intermodal volume."

Analysts at Citi this week lowered their third-quarter earnings estimates for railroads, saying disappointing volume is likely to more than offset emerging pricing strength. Citi said volume weakness was widespread across the group, with carloads decelerating consistently through the quarter across multiple commodities.

"There is no single solution to this problem, but railroads are bringing intermodal yard capacity back online to increase storage availability as well as working with customers and truckers to accelerate container pickup among other efforts," Mr. Gray said.

The AAR said U.S. slipped traffic fell 0.5% last week, with a 4.2% rise in carloads more than offset by a 4.4% drop in the volume of intermodal containers and trailers. U.S. rail traffic is up 9% for the first 39 weeks of the year.

Canadian rail traffic fell 3.9% last week, with intermodal units down 9.2% and carloads up 1%. Canadian rail traffic is up 5% for the first 39 weeks of the year.

Mexican rail traffic slid 15.6% last week amid a 5.9% drop in carloads and a 25.7% plunge in intermodal units. Mexican rail traffic is up 5.3% for the year to date, the AAR said.

 

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

 

(END) Dow Jones Newswires

October 06, 2021 15:27 ET (19:27 GMT)

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