AAR: Rail Carloads Down, Intermodal Volumes Up
Recently, rail carload and intermodal volumes, for the month of October, were released by the (AAR). Within the , the answers were mixed. Rail carloads are on a downward spiral, while intermodal volume seems to be on the rise ─ in fact, the latter just turned in its best monthly performance on record.
Rail carloads─at 912,772─fell 6.6 per cent, or 64,634 carloads annually. Even though there has been widespread loss across the board, the AAR did reveal that 10 of the 20 carload commodity groups that it monitors saw significant year-on-year gains in October 2020. These groups included:
Commodity Groups on the Rise
- Grain: up 21,557 carloads (25.5 per cent),
- Iron & steel scrap: up 3,579 carloads (29.1 per cent),
- Waste & nonferrous scrap: up 1,527 carloads (11.2 per cent).
Commodity Groups on the Decline
- Coal: down 56,343 carloads (19.1 per cent),
- Crushed stone, sand, and gravel: down 14,275 carloads (16 per cent),
- Petroleum & Petroleum products: down 10,199 carloads (20 per cent).
If you exclude coal from the equation, the United States’ October rail carloads were off 8,291 carloads, which is 1.2 per cent annually, and if you omit grain from the gains, they were down 29,848 carloads ─ 5 per cent.
Intermodal containers and trailers─at 1,169,874─increased exponentially with a rise of 10 per cent, or 105,966 units, annually, as they surged towards the high-volume intermodal month on record.
“Thanks largely to rising imports and inventory restocking in preparation for the holidays, October was the best month ever for U.S rail intermodal, with volumes up by a third from April of this year. That’s a stunning increase in six months,” said AAR Senior Vice President John T. Gray in a statement.
“Meanwhile, U.S rail carloads rose in October for 10 of the 20 carload categories we track, the most since the pandemic began. Carloads of grain in October were their highest in 13 years, while carloads of motor vehicles and parts have recovered after falling close to 90% earlier this year. Changes in energy markets continue to pressure carloads of coal, petroleum products, and frac sand and holding back total carloads. Excluding those three categories, carloads in October were a few percentage points higher than last year,” he added.
Elon Musk's Boring Co. planning wider tunnels for freight
Elon Musk’s drilling outfit The Boring Company could be shifting its focus towards subterranean freight and logistics solutions, according to reports.
A Boring Co. pitch deck seen and shared by Bloomberg depicts plans to construct wider tunnels designed to accommodate shipping containers.
Founded by Tesla CEO Musk in 2016, the company initially stated its mission was to offer safer, faster point-to-point transport for people, particularly in cities plagued by traffic congestion. It also planned longer tunnels to ferry passengers between popular destinations across the US.
The Boring Co. completed its first commercial project earlier this year in April. The 1.7m tunnel system is designed to move professionals between convention centres in Las Vegas using Tesla EVs. It says the Las Vegas Convention Centre Loop can cut travel time between venues from 45 minutes to just two.
Boring Co.'s new freight tunnels
The Boring Co.'s new tunnel designs would allow freight to be transported on purpose built platforms, labelled as “battery-powered freight carriers”. The document shows that, though the containers could technically fit within its current 12-foot tunnels, wider tunnels would be more efficient. Designs for a new tunnel, 21 feet in diameter, show that they can comfortably accommodate two containers side-by-side, with a one-foot gap between them.
The Boring Co.’s new drilling machine, dubbed Prufrock, can tunnel at a rate of one mile per week, which is six times faster than its previous machine, and is designed to ‘porpoise’ - mimicking the marine animal by ‘diving’ below ground and reemerging once the tunnel is complete.
Tesla’s supply chain woes
Tesla is facing its own supply chain and logistic issues. The EV manufacturer has raised the price of its vehicles, with CEO Musk confirming the incremental hike was a result of “major supply chain pressure”. Musk replied to a disgruntled Twitter user, confused as to why prices were rising while features were being removed from the cars, saying the “raw materials especially” were a big issue.
Car manufacturing continues to be one of the industries hit hardest by a global shortage in semiconductor chips. While China’s chip manufacturing levels hit an all-time high in May, and the US is proposing a 25% tax credit for chip manufacturers, demand still outstrips supply. Automakers including Volkswagen and Audi have again said they expect reduced vehicle output in the next quarter due to a lack of semiconductors, with more factory downtime likely.
Top Image credit: The Boring Company / @boringcompany