(The following story by John D. Boyd appeared on The Journal of Commerce website on December 14, 2009.)
WASHINGTON, D.C. — Major U.S. railroads posted their highest new loadings of chemical cargoes in 2009 during the week ending Dec. 5, a signal of stirring industrial demand.
Chemicals, usually carried in rail tank cars, comprise the second-largest shipment category for the large Class I carriers and regional lines that report traffic through the Association of American Railroads.
So the fact that their 29,415 chemical railcar originations topped the previous high this year – of 29,251 as of Aug. 29 – was a welcome sign of strength.
The largest rail category, coal, is running well behind last year’s pace, partly because of lower industrial demand for electricity to run factories. Major U.S. lines loaded 130,625 railcars in the latest week, but that was 13.5 percent lower than the same week last year.
At this point in 2008, the economy was contracting sharply in the wake of the credit crisis but that had not yet slashed coal loadings. By contrast, chemical loadings at this point last year were falling as factories signaled they would not need them for future output.
This time, though, the rising strength in chemical demand is a sign of optimism by a range of industrial customers, who use chemicals in products from plastics and solvents to computer chips and packaging materials. The latest AAR chemical volume is 13.9 percent higher than during the same week of 2008.
In all, major U.S. carriers picked up 284,177 new carloads of bulk commodities and equipment in the Dec. 5 week, a period in which traffic could have been mildly reduced due to a 5-day strike by train engineers in Canada against Canadian Pacific Railway. U.S. railroads originated 207,242 intermodal units. Both numbers are below 2009 highs but in the upper end of the recent range.