Intermodal shows strength in October

The Association of American Railroads (AAR) reported Monday that intermodal traffic in October was up 14.0% from October 2009 and up 1.2% from October 2008.

“The weekly average of 235,444 intermodal units last month was the highest since October 2007, and the 12th highest weekly monthly average for intermodal on record,” said the AAR.

Carload traffic was another story. The AAR said monthly carloads for October 2010 were up 8.7& compared from October last year, but still down7.9% compared with October 2008. According to AAR’s November Rail Time Indicators Report (RTI), the weekly average of 299,108 carloads last month was the highest since October 2008.

“Last week the government announced that GDP grew roughly 2% in the third quarter of 2010. Rail traffic in October suggests that similarly moderate growth is continuing into the fourth quarter,” said AAR Senior Vice President John T. Gray. “Just like our nation’s economy still has further to go to full recovery, so does rail traffic. Still, traffic is much better than it was a year ago, especially on the intermodal side, and railroads look forward to continuing to move the economy forward.”

The association said railroads continue to bring employees back to work and cars out of storage. In September, railroads added 1,169 people to employee rolls. They brought 12,799 rail cars out of storage in October, with 318,275 cars, or roughly 20.8% of the North American railcar fleet, still in storage.

Steve Barger, director, Industrial Manufacturers, for KeyBanc Capital Markets, Inc., said in a note Tuesday that AAR’s report was indicative of an industry rebound. “While the pace of cars coming out of storage has moderated from October, we believe this represents another solid outcome for the railcar manufacturers and reinforces our constructive view on Trinity Industries, Inc. The Greenbrier Companies, Inc., and American Railcar Industries, Inc.,” Barger said.