News & Events

More Shipments a Good Sign for the Economy

More than 1.4 million carloads of goods and commodities were shipped across the country in rail cars during the month of July, according to an August report by the Association of American Railroads.

This is a slight decline from July 2012, as the amount of carloads of coal and grain fell—both commodities shipped out of the Corridor—but is still a steady increase since 2009. In July of this year, the weekly average of goods shipped was around 277,000 carloads compared with 262,000 carloads in July 2009.

“More moving is a reflection of more consumption,” said Ann Campbell, an associate professor of management sciences at the University of Iowa who studies intermodal movement—goods shipped by more than one means of transportation.

Demand for rail service is a result of the demand for the goods that railroads haul elsewhere and can be a gauge for broader economic activity.

Carloads of petroleum were up 24.9 percent in July 2013 over July 2012. Crushed stone, sand, iron and steel scrap, cement, and primary metal products also all saw increases in the number of carloads year-over-year.

Additionally, the number of consumer goods being shipped have led analysts to believe holiday sales will rise from last year, according to Bloomberg News. Total U.S. intermodal volume was up 4 percent for the four weeks ending Aug. 10 compared with a year ago.

However, Campbell was quick to note that just because more trains may be moving across the country, it doesn’t mean all the goods they’re shipping are American made.

“It could have arrived at a port and was then put on a train,” she said. “So it’s not clear who makes it.”

Another factor possibly contributing to a rise in rail shipments, Campbell said, is that rail is more cost effective. Trains can move more goods at a time and are cheaper when rising gas prices and new rules regulating truck drivers hours are factored in, she said.

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