Freight carried by major U.S. railroads fell by 7 percent in the second quarter of 2015
compared with the same period in 2014, confirming that large parts of the industrial economy are in recession.
The major Class 1 railroads carried 431 billion ton-miles of freight in the three months ending June, down from 463 billion ton-miles in 2014, according to the U.S. Surface Transportation Board
Changes in freight volumes reflect broader difficulties in the industrial economy. Rail operators have been struck by a perfect storm which has hit both their traditional and new business lines
Coal shipments to power plants, the biggest commodity on the network, accounting for about one-third of total tonnage, have been hit by a combination of environmental regulations and low gas prices.
Coal shipments were down by 27 million tonnes, around 15 percent, in the second quarter compared with same 2014 period.
Petroleum shipments, one of the fastest growing sources of new business during the oil boom, fell more than 650,000 tonnes, 5 percent, as production began to peak and new pipelines diverted crude from the rails.
And shipments of sand and gravel, a key ingredient in fracking, plunged by more than 2 million tonnes, nearly 14 percent, as the number of new wells drilled and fracked tumbled.
Shipments of a range of other items from chemicals to fertilisers and other industrial supplies were also lower as the industrial economy ran into stiff headwinds from a stronger dollar and sluggish capital spending.
The slowdown in industrial-related freight has continued into the second half of the year according to data from a range of other sources.
Total traffic on U.S. railroads in the 42 weeks ending on Oct. 24 was down 1.3 percent compared with 2014, according to weekly carload statistics published by the Association of American Railroads (AAR).
Shipments of intermodal shipping containers, which mostly handle manufactured products, were up 2.2 percent but shipments using box cars, tank cars, hoppers and gondolas, which handle farm and industrial products, were down 4.5 percent.
Shipments were down in five of the 10 freight categories including coal (10 percent), forest products (3 percent), metallic ores and minerals (10 percent), nonmetallic minerals (2 percent) and petroleum (7 percent).
The downturn has deepened and spread to more sectors as the year has progressed, according to AAR data.
According to the U.S. Federal Reserve, total industrial output was 0.4 percent higher in September 2015 than September 2014.
But while production of consumer goods was up 2.6 percent and business equipment 1.8 percent, industrial supplies were up just 0.2 percent and production of raw materials was actually down 0.2 percent.http://www.reuters.com/article/2015/11/03/usa-economy-railway-kemp-idUSL8N12Y2TA20151103