Rail Traffic Nears 4 Year High

We are just a few thousand cars off a 4 year high in rail traffic. Total N. American rail traffic came in at 704K last week, up from 702K the week before and well ahead of the 693K we saw last year. We also will note a (10k) differential in coal shipments in ’12 vs ’11 which has been consistent with what we have seen. This is due to the collapse in natural gas prices and a surge in utilities switching from coal to gas. Since the gas is shipped by pipeline, that causes a decrease for that sector of rail traffic. We note and adjust for the difference because electricity production is flat YOY, it is just the fuel used for its production has changed. See below:

Because of that, in order to get a true YOY traffic comp, we normalize the coal number. The 4 year high for rail traffic was set last year in week 39 at 721K cars (week 39/40 it the typical annual peak). So if we adjust for the coal difference we are ~7K cars away from a record.

It doesn’t seem like the kind of thing we should be talking about if the economy is at “stall speed” or “in recession”. In fact, were that the case the words “near a record” would not be written and we would be lamenting YOY stagnation or even declines in traffic.

Here is the chart: