The Association of American Railroads has released its Rail Time Indicators (pdf) report for January 2011 which provides a great deal of data covering the freight rail industry in 2010. We have previously followed trends in railroad traffic more closely than many other macroeconomic indicators partially inspired by Warren Buffett’s comments regarding his choice of railcar loadings as one of the economic indicators he would wish to receive if stranded on a desert island. The January AAR report is particularly interesting because it includes comparisons to prior years and reveals that the rebound in 2010, while very sharp, has not come close to erasing the devastating impact of the recession. Read this article for more details.
A debate over regulatory oversight of American railroads is heating up in Washington. A study report from the Senate’s Committee on Commerce, Science, and Transportation has found that major railroads are now financially stable and enjoy substantial pricing power. In light of improved conditions since the enactment of railroad deregulation in 1980, the report suggests that railroads should be under greater scrutiny in terms of pricing particularly as it relates to practices such as charging captive shippers higher rates than other shippers. The study has drawn a sharp rebuke from the Association of American Railroads. Read this article for more information and an interesting piece of trivia.
The January 2010 issue of Rail Time Indicators was published today and a video summary of the report appears below. As the report notes, 2009 was a year that hopefully will not repeat in the future. For the full year, U.S. railroads originated the lowest number of carloads since before 1988 when the AAR data series began. Good Riddance indeed. Read this article for more details and to view a video summary for 2009.
In a recent CNBC interview, Warren Buffett was asked to identify one economic indicator that he would consider most relevant for evaluating overall economic conditions if he was stranded on a desert island for a month and had no other access to information. He immediately mentioned rail car loadings as a top candidate for this “desert island indicator”, and has made similar comments in the past. In light of Mr. Buffett’s comments, let’s take a look at September’s “Rail Time Indicators” report for clues regarding the state of the overall economy.
The weekly and monthly data published by the Association of American Railroads (AAR) can be useful for evaluating the state of the overall macroeconomy. Warren Buffett has stated that he follows such indicators on a regular basis and AAR reports make the data available to any investor. Read this article for more information on the type of data provided.