It’s one thing to look down the list of commodities and carloads on the Association of American Railroads reports of weekly rail traffic; it’s something else to know what goes where and why. Let’s take the recent Week 42 report apart.
First, the Standard Transportation Commodity Code, STCC for short, assigns a seven-digit number to every conceivable commodity that might be moved across any segment of railroad. The first two digits represent the broad commodity group: 01 for unprocessed farm products, 10 for metallic ores, 11 for coal, and so on.
The next three digits represent subgroups — for STCC group 01, 132 is corn, 137 is wheat, 144 is soybeans, down through 19x for miscellaneous field crops. The last two digits designate specific commodities within the subgroup. Under 01 139, Grain (NOC - not otherwise categorized) we have 10, buckwheat; 15, spelt; 25, millet; and several others.
The AAR reports U.S., Canadian, Mexican, and total North American rail traffic separately; our purposes are best served with the North American total numbers because so many of the Mexican and Canadian carloads either originate or terminate in the U.S. Turning to the week 42 report, the first line is carloads and is the total of all non-intermodal rail shipments in, well, carloads. Under carloads, we have all the commodity groups, and here is where knowing the STCC basics is essential.
The Chemical Group is STCC 28 and includes industrial chemicals, chlorine, plastic pellets, fertilizers (phosphate rock is STCC 14, non-metallic minerals) and ethanol. Most Class I roads include petroleum products, STCC 29, and crude oil, STCC 131, in chemicals, too, so one has to be careful making the jump from AAR carloads to Class I railroad commodity reports.
Coal, STCC 11, is what it says: anthracite (mainly northeastern Pennsylvania), bituminous (“Appalachian” from western Pennsylvania south through West Virginia, Virginia, parts of Kentucky and Tennessee and some Alabama, plus Colorado and Utah) and lignite (Powder River Basin). NS and CSX are the principal bituminous carriers; BNSF and UP are the sole Powder River Basin occupants.
Grain, as in the example above, is what comes out of the field. Farm and food products go into the STCC 20 group and include everything made from field crops or animals: corn sweeteners, soybean oil, flour, orange juice (think CSX Train OJ-1 for Tropicana), canned or frozen anything, dog food and beer. Forest products are anything to do with wood or plywood (STCC 24) or paper (STCC 26).
Metallic ores include iron ore out of the Missabe Range, copper ore off the Copper Basin Railroad, and aluminum ore off the former Alcoa roads, now part of the Genesee & Wyoming Company. Into this group go metallic raw materials products, such as _-beams, copper plate or coiled steel, and iron-based metal scrap used in electric arc furnaces. Non-metallic minerals include crushed construction stone, industrial sand for glass-making, road salt, rip-rap, gravel, and frac sand. Also here one finds cement, wallboard, and decorative stone for garden projects.
Motor vehicles and parts, STCC 371 and 41118, are exactly that, except that parts moving as intermodal shipments are not captured. The number here represents whatever moves in or on classic freight cars. The “other” category includes municipal solid waste, construction debris, and anything else missed in the Standard Transportation Commodity Code groupings.
And finally, there’s intermodal. The number captures every container, trailer, or other equipment with a reporting mark ending in “U.” What’s in them doesn’t matter; it could be anything from lumber for export to auto parts for the Indiana Honda plant to made-in-China furniture destined to a Wal-Mart. It’s also the fastest-growing commodity group for the railroad industry.
Now turn to the AAR’s week 42 report and read, “Total U.S. rail traffic for the week was 553,943 combined carloads and intermodal units, up 2.1 percent compared with the same week last year. Eight of the 10 carload commodity groups posted increases compared with the same week in 2012, including petroleum and petroleum products with 13,644 carloads, up 15.5 percent; and grain, with 22,360 carloads, up 9.6 percent. Commodities showing a decrease compared with the same week last year included coal with 108,469 carloads, down 6.0 percent.
Armed with the STCC explanation above, look at the tables accompanying the report (remember: we’re now looking at U.S. traffic only). You’ll see the very numbers in the press release, but you’ll also know that chemicals include ethanol and fertilizer, and that petroleum products include both crude oil in unit trains and LPG in carload service to local stations, with the former skewing the numbers.
Forest products may be up, but from reading the papers you know newsprint is down and housing starts are showing some signs of life. Non-metallic minerals— look to the year-to-date column — are getting momentum from frac sand; the same is true for the metals group for its steel piping going to the drill sites. And coal is no surprise, thanks to the Environmental Protection Agency’s aggressive stance toward aging steam plants and the low price of natural gas.
So, that’s the weekly AAR Rail Traffic Reports, the stats behind why unit trains of tank cars out of North Dakota are up but center-beams of dimensional lumber out of the Pacific Northwest are less prevalent. Autos are up thanks to pent-up demand for more fuel-efficient cars; ethanol is down because of the more fuel-efficient cars and less driving.
Next you’ll want to look at the commodity reports for the individual railroads, putting them in the context of the weekly AAR reports. Be sure to watch this space for some clues on what to watch for.
I just wish the world would stop displaying data in tables and do more in time-series charts. It's so easy these days - there's no excuse. A change may or may not be significant, and might or might not signal a trend. There is no easier way to see both of these issues clearly than a chart.
Just one of my pet-peeves...