Monday, July 16, 2007

Rail Volumes Down in June

From the American Association of Railroads:

U.S. freight railroad carload traffic fell 2.7 percent in June 2007 compared with June 2006, while intermodal traffic fell 1.8 percent compared with the same month last year, the Association of American Railroads (AAR) reported today.

Overall, U.S. railroads originated 1,344,296 carloads of freight in June 2007, down 37,679 carloads (2.7 percent) from June 2006. U.S. railroads also originated 961,545 intermodal units in June 2007, a decrease of 17,956 trailers and containers (1.8 percent) from June 2006.

“Rail volumes remained relatively soft in June, though they are up against some very strong comparisons from last year,” noted AAR Vice President Craig F. Rockey. “Most economists are fairly upbeat about economic growth in the second half of this year, and when the economy does pick up, we can expect rail volumes to rise commensurately,” Rockey added.

Once again, Bonddad returns to the old Dow theory -- transports an transportation have to perform well for the economy to be doing well. The reason is simple -- goods have to be shipped somewhere. Declining rail traffic indicates the manufacturing expansion isn't happening as strongly as we would like.