American railroads are already in recession with no end in sight
Hat tip, Trainorders:
Date: 10/07/19 17:08
Railroad Recession
Author: bigkidpgh
Interesting article in today’s Pittsburgh Post-Gazette.
https://www.post-gazette.com/business/pittsburgh-company-news/2019/10/07/American-railroads-recession-CSX-Union-Norfolk-Southern-tariffs/stories/201910070103
THOMAS BLACK
Bloomberg
OCT 7, 2019 1:44 PM
This year’s railroad slump is getting worse as a slowdown in manufacturing threatens broader weakness in the U.S. economy.
There’s no bottom in sight as the decline in carloads for large U.S. railroads widened to 5.5% in the third quarter, the biggest drop in three years, according to weekly reports from the Association of American Railroads. Shipments are down for autos, coal, grain, chemicals and consumer goods, with crude oil the only bright spot.
The rail downturn underscores the damage from the U.S.-China trade war, which is making shippers more cautious and crimping freight — validating earlier warnings from railroad executives. Companies that stocked up on inventory last year amid President Donald Trump’s tariff threats are now working it off. Adding to the cargo drop, a brief rise in coal exports has fizzled and bad weather has delayed crop harvests and dragged down grain carloads.
“What’s quite clear is that we’re not yet at a trough. Trains have not yet bottomed,” said Ben Hartford, an analyst with Robert W. Baird & Co. “We need to have some clarity in trade policy.”
While a railroad recession doesn’t necessarily presage a broader slump, it’s a dramatic turn from a year ago when rising shipments of autos, coal, lumber, chemicals and other commodities spurred U.S. rail carloads to rise 3.6% in 2018. Last year’s hot freight market jacked up trucking prices, and transportation costs spiked for companies including General Mills Inc. and Procter & Gamble Co.
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= new reply since forum marked as read
I'm only an old person who wears rumpled clothing and talks funny, but, I've noticed some troubling signs in shipping.
Starting about two months ago there was a marked decline in transport. Especially, into the interior of the US. It had almost stopped for two weeks. I suppose there could have been repairs further up the line I didn't know about, but, I doubt it.
A few weeks ago I saw something I've never seen before and I've been watching for many years. I saw an entire empty 40 car shipping container train heading North. That's got to be an expensive undertaking. Also, during this time, the trains I do see that do have shipping containers are either carrying something extremely light or are empty containers. They've gone from having at least four engines to now usually one or two. The total number of trains seems to be down, too. I'd say by about half. I'm seeing more non-container cars and liquid hauling stock. Maybe, LPG or even corn syrup. ( 
) I sincerely believe this is an effect of the tariffs and the activity I'm seeing is mainly the re-positioning of rolling stock and containers.
Your friendly local Train Spotter.
