According to CNN, fall is the peak shipping season on North America’s railroads and nearly one third of cross-border traffic between the U.S. and Canada comes courtesy of two carriers, Canadian National and Canadian Pacific Kansas City Southern.  Both carriers seem to have avoided a long-term shutdown last week after a brief lockout of union employees.  This reminds us of rail’s importance to both the U.S. economy and as a leading indicator.

For the week ending August 17, 2024, weekly rail traffic was up 8% versus the same week in 2023.  This follows the previous weekly report of an increase of 5.2%.  However, according to the Association of American Railroads, total volume of railcar loads is down 3.9% for the first 33 weeks of the year.

Rail traffic is considered a good leading economic indicator since it reflects a result of demand elsewhere.  When asked if he could have only one economic indicator, Warren Buffet once described rail car loadings as his  “desert island indicator.”