Rail Traffic Holds Gains

Total N. American rail traffic rebounded from the usual Turkey week dip to surpass 700k cars last week. As usual, if we adjust for the collapse in coal shipments (18k below last year) due to the increase in natural gas usage by utilities, we see a decent YOY gain in volumes which is good given the NE is still feeling the effects of Sandy.

Going forward, traffic should decline through the rest of the year and collapse post Xmas before rebounding hard in January. I would expect to see some significant gains early in the year as there will be a massive rebuilding effort in the NY area and that will require a mountain of lumber and building products. Those categories should remain strong irrespective of any “Fiscal Cliff” nonsense as railroads are the main shipper of those items.

All this remain consistent with a gradually recovering economy…..still…

Here is the chart




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