Railroad traffic falls 1.3 percent in June

July 6, 2012

WASHINGTON (AP) — Traffic on U.S. railroads fell 1.3 percent last month compared with June 2011, the industry's main trade group said, reflecting slower demand for some U.S. commodities as the global economy weakens.

The Association of American Railroads said U.S. railroads carried about 1.1 million carloads in June. Leading the declines were shipments of coal, grain and metals. Several European countries are in recession, while growth is slowing in China. That lowers the need for materials used in manufacturing and construction.

Demand for coal, which is used for making steel as well as providing electricity, has shrunk as utilities turn to cheap natural gas and due to mild weather in the U.S. That cuts deliveries from mines to power producers.

Excluding coal, shipments were up 2.2 percent.

Because so many everyday goods are moved by rail, traffic on the tracks tends to be an important gauge of economic health.

In total, railroads reported declines in 11 out of 20 commodity groups. Leading growth in carloads were shipments of oil and related products, cars and car parts and food.

Transfers between trains and other means of shipment, like trucks or ships, rose 5.2 percent. Intermodal shipments are mostly comprised of retail goods like clothing or products from overseas, shipped in giant containers. They're getting a boost from railroads' efforts to take more business away from trucks by improving their speed and efficiency.