Rail Time Indicators Sep 2011

Rail Time Indicators
A Review of Key Economic Trends Shaping Demand for Rail Transportation
Policy & Economics Department Association of American Railroads Washington, D.C.
October 7, 2011
Rail Time Indicators is a non-technical summary of many of the key economic indicators potentially important to U.S. freight railroads. It is issued monthly by the Policy and Economics Department of the Association of American Railroads. Rail Time Indicators is free of charge. To get on the e-mail distribution list for Rail Time Indicators, send a request including your name and business affiliation, if any, to Beth Eagney at beagney@aar.org. If you have questions or comments about the content of Rail Time Indicators, please contact Dan Keen (dkeen@aar.org, 202-639-2326) or Shannon Stare (sstare@aar.org, 202-639-2322). All media inquiries should be directed to Holly Arthur (harthur@aar.org, 202-639-2344).
The last six editions of Rail Time Indicators are available on the AAR web site here.
Rail traffic data in Rail Time Indicators are sometimes presented on a seasonally adjusted basis and sometimes on a non-seasonally adjusted basis. Because of the nature of the AARs weekly rail traffic data and the nature of rail traffic (e.g., daily data are not available; some months have four weeks of data and some have five; holidays may be in one rail traffic month one year and in a different month the next; rail traffic varies by the day of the week; some commodity categories can exhibit wide swings in carloads from month to month for reasons unrelated to seasonal variations; the weather can have significant effects on traffic, etc.), the seasonal-adjustment process for rail traffic is not completely precise. Seasonally adjusted rail traffic data should be considered a complement to, rather than a replacement for, unadjusted rail traffic data. Copyright 2011 by the Association of American Railroads. Reproduction or retransmittal of Rail Time Indicators within a company for internal use is allowed, as is reasonable redistribution outside a company (for example, passing it on to someone you think might be interested in it). Unless approved by the AAR, reproduction or retransmittal for commercial use is prohibited except for short excerpts or quotations.
Uploading of Rail Time Indicators to a public web site is prohibited unless approved by the AAR.
Information in Rail Time Indicators is obtained from sources believed to be reliable. However, the Association of American Railroads makes no representations as to the accuracy or completeness of such information and assumes no liability for errors or omissions.
SUMMARY OF MOST RECENT DATA

Economic Indicator U.S. Freight Rail Traffic (p. 2) Most Recent Data Not Seasonally Adjusted: Carloads in September 2011 1.1% over September 2010; intermodal in September 2011 2.3% over September 2010. Seasonally Adjusted: Carloads in September 2011 1.1 % over August 2011; intermodal in September 2011 1.0% over August 2011. Canadian Freight Rail Traffic (p. 4) Not Seasonally Adjusted: Carloads in September 2011 3.9% over September 2010; intermodal in September 2011 0.1% from September 2010. Seasonally Adjusted: Carloads in September 2011 0.6% from August 2011; intermodal in September 2011 1.1% from August 2011. Gross Domestic Product (p. 21) Purchasing Managers Index (p. 22) Non-Manufact. Index (p. 22) Manufacturing Inventories and Sales (p. 24) Industrial Production (p. 25) 1.3% in Q2 2011 (revised up from 1.0%), according to the third estimate released by the BEA on September 29. to 51.6 in September 2011 from 50.6 in August 2011. New orders remained at 49.6 in September 2011, the same as in August 2011. to 53.0 in September 2011 from 53.3 in August 2011. Manufacturing sales 0.2%, manufacturing inventories 0.4%, and inventory-to-sales ratio 0.6% in August 2011 from July 2011. Overall industrial output 0.2% in August 2011 over July 2011; manufacturing output 0.4% in August 2011 over July 2011. to 77.4% in August 2011 from 77.3% in July 2011. 103,000 net new jobs created in September 2011 compared with August 2011. Combined July and August job gains were revised upward by 99,000. Flat at 9.1% in September 2011, the same as in July and August. 1,121 in August 2011 from July 2011 to 160,107 employees. to 45.4 in September 2011 from 45.2 in August 2011. Virtually unchanged in August 2011 from July 2011. to 13.0 million (annualized) in September 2011 from 12.1 million in August 2011. 5.0% in August 2011 to 571,000 from 604,000 in July 2011. 0.4% in August 2011 over July 2011 and 3.8% for the year ending in August. Core inflation 0.2% in August 2011 from July 2011. to 260,317 on October 1, 2011 (17.1% of the fleet), down 11,087 cars from September 1, 2011.
Capacity Utilization (p. 27) Employment (p. 29)
Unemployment Rate (p. 29) Class I RR Employment (p. 30) Consumer Confidence (p. 31) Retail Sales (p. 32) Light Vehicle Sales (p. 33) Housing Starts (p. 34) Consumer Price Index (p. 35)
Rail Freight Cars in Storage (p. 36)
Rail Time Indicators October 7, 2011
Page 1 of 36
U.S. AND CANADIAN FREIGHT RAILROAD TRAFFIC

Who releases it and when? The Association of American Railroads (AAR) releases its Weekly Railroad Traffic report every Thursday morning. The report contains rail traffic data for the previous week. Weekly data are aggregated into monthly figures in Rail Time Indicators. When comparing year-over-year rail traffic, comparisons are to the period 52 weeks prior to the present period. Rail traffic data in Rail Time Indicators are sometimes presented on a seasonally adjusted and sometimes on a non-seasonally adjusted basis. Unless stated otherwise, rail data herein should be assumed to be not seasonally adjusted. Generally speaking, non-seasonally adjusted rail traffic is compared on a year-over-year basis (e.g., June 2011 vs. June 2010) while seasonally adjusted rail traffic is compared on a month-over-month basis (e.g., June 2011 vs. May 2011).
What is it and why is it important? AAR rail traffic data are reported as carloads or as intermodal units. Carload traffic is classified into one of 20 different commodity categories (see the table on page 6 for a list) and is carried in a variety of rail car types (e.g., tank cars, covered hoppers, gondolas, boxcars, etc.). A unit of rail intermodal traffic is either a shipping container (currently about 85% of U.S. rail intermodal traffic) or a truck trailer (about 15% of intermodal traffic) carried on a railroad flat car. In the monthly rail traffic data reported in Rail Time Indicators, intermodal is not included in carload figures. Moreover, commodity-level detail on intermodal traffic is not available. In other words, information on what is inside the containers and trailers is not available. Railroads reporting to the AAR collectively account for around 95% of total U.S. and Canadian freight rail traffic. Freight railroading is a derived demand industry: demand for rail service occurs as a result of demand elsewhere in the economy for the products railroads haul. Thus, rail traffic is a useful gauge of broader economic activity, especially of the tangible economy. (See chart on page 21.)
What are the latest numbers for U.S. railroads? U.S. freight railroads originated 1,195,671 carloads in September 2011, an average of 298,918 carloads per week and up 1.1% over September 2010 (see charts below). During the last week of September Week 39 of 2011 U.S. railroads originated 312,170 carloads of freight, which is more carload traffic than in any week since Week 45 in November 2008. U.S. rail carloads in the third quarter of 2011 were basically flat down 0.04% to be precise compared with the third quarter of 2010 (see the chart on the bottom left of page 7). Carloadings in the first nine months of 2011 totaled 11,329,150, up 1.8% over the first nine months of 2010. Weve noted before that the recession for railroads started earlier than the recession for the overall economy U.S. rail carload traffic peaked in 2006 (see chart below left). Through the third quarter, U.S. rail carloads in 2011 were 87% of what they were during the covered period of 2006 (see the chart on the bottom right of page 4).
% Change in Total U.S. Rail Carloads From Same Month Previous Year: Jan. 2006 - Sept. 2011
20%
2006 (peak year)
Average Weekly U.S. Rail Carloads: All Commodities

(not seasonally adjusted)
360,000 340,000 320,000
2011 2008
15% 10% 5% 0% -5%
September 2011 was up 1.1% over September 2010 and up 9.1% over September 2009.
300,000 280,000
2010
-10% -15%
2009
260,000 240,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Data are weekly average originations for each month, exclude the U.S. operations of CN and CP, and reflect revisions to original reporting. Source: AAR Weekly Railroad Traffic
-20% -25% 2006 2007 2008 2009 2010 2011
Data are based on originations, are not seasonally adjusted, exclude U.S. operations of CN and CP, and reflect revisions to original reporting. Source: AAR Weekly Railroad Traffic
Page 2 of 36
In September 2011, 13 of the 20 carload commodity categories tracked by the AAR saw increases compared with September 2010 (see table at right). Commodities showing carload gains on U.S. railroads in September 2011 included coal (up 6,356 carloads, or 1.2%, their first year-over-year monthly gain since March 2011 see page 12); primary metal products (mainly steel, up 5,272 carloads, or 14.4%); motor vehicles and parts (up 4,445 carloads, or 8.2%); and crushed stone and sand (up 4,306 carloads, or 6.2%). In percentage terms, the biggest increase in U.S. carloads in September 2011 over September 2010 was in petroleum and petroleum products, which saw a 16.1% increase. Crude petroleum is only a small percentage of carloads in this category, but crude carloads are growing rapidly and likely accounted for most of the categorys increase for the month.
# of AAR Commodity Categories With Year-Over-Year Gains For U.S. Railroads* Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2009 0 1 0 0 0 0 0 0 1 1 6 10 2010 11 13 16 19 19 17 13 16 14 15 13 16 2011 15 15 15 9 8 14 12 12 13
*Out of 20. Source: AAR On the down side, U.S. carloads of grain were 16,849 lower (18.2%) in September 2011 than in September 2010, continuing whats now a three-month slide in year-over-year grain carloadings (see page 14).
Excluding coal, U.S. rail carloads in September 2011 were up 1.1% over September 2010 (see the charts in the middle row of page 15). Excluding coal and grain, U.S. rail carloads in September 2011 were up 4.3% over September 2010 (see the charts on the bottom row of page 15). Carloads of industrial products the combination of chemicals, paper, metal products, autos and auto parts, crushed stone and gravel, metallic ores, and stone and glass products (which includes cement, among other things) rose 6.3% in September 2011 over September 2010 (see charts on the top row of page 16). These increases are consistent with an economy that is probably still growing, even if it is more slowly than most of us would prefer. The table on page 6 has much more commodity-level detail for September 2011 for U.S. railroads; the table on page 7 has commodity-level detail for the third quarter of 2011. On a seasonally adjusted basis, total U.S. rail carloads were up 1.1% in September 2011 compared with August 2011 (see the top left chart on page 19). Seasonally adjusted carloads excluding coal were down 0.1% in September 2011 from August 2011. Seasonally adjusted carloads excluding coal and grain were down 0.1% in September 2011 from August 2011. Pages 19 and 20 have more charts covering seasonally adjusted rail traffic. U.S. rail intermodal traffic rose for the 22nd straight month in September 2011.1 U.S. railroads originated 949,606 containers and trailers for the month for an average of 237,402 units per week, up 2.3% from September 2010, up from an average of 235,968 in August 2011, and the highest weekly average for any month since October 2007 (see the chart on the top right of the next page). Week 39 of 2011, the last week of September, had intermodal volume of 250,864 intermodal units, the 12th highest-volume intermodal week ever for U.S. railroads and the highest of any week since Week 39 in September 2007. U.S. rail intermodal volume in the third quarter of 2011 was up 1.2% over the third quarter of 2010 (see the chart on the bottom right of page 7). Intermodal volume in the first nine months of 2011 totaled 8,881,226 containers and trailers, up 5.4% over the first nine months of 2010. Like carloads, U.S. intermodal volume peaked in 2006 (see the chart on the top left of the next page). U.S. rail intermodal volume in 2011 through the third quarter was 96% of what it was through the third quarter of 2006 (see the chart on the bottom of the next page). Intermodal isnt quite back to where it once was, but its a lot closer to that point than carload traffic is.
The November 2011 issue of Trains magazine has several very good stories on rail intermodal.
Page 3 of 36
Average Weekly U.S. Rail Intermodal Traffic

260,000 250,000 240,000 230,000 220,000 210,000 200,000 190,000 180,000 170,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Data are weekly average originations for each month, exclude U.S. operations of CN and CP, and reflect revisions to original reporting. Source: AAR Weekly Railroad Traffic
% Change in U.S. Rail Intermodal Traffic From Same Month Previous Year: Jan. 2006 - Sept. 2011
25% 20% 15% 10% 5% 0% -5% -10% -15% -20% -25% 2006 2007 2008 2009 2010 2011
2006 (peak year)
2008 2011 2010 2009
Seasonally adjusted U.S. rail intermodal traffic was up 1.0% in September 2011 over August 2011 (see the top right chart on page 19.) One way to remove the week-to-week and month-to-month variability of rail traffic is to take moving averages over a long period of time. Thats what the chart below left does. It shows 52week moving averages for U.S. rail carload and intermodal traffic. Note the 2006 peak, slow general decline in 2007 and 2008, and the much sharper decline in 2009. There has been a clear recovery since then, but not yet enough to get back to where traffic levels once were. As noted above, intermodal is much closer to its peak than carloads are. The bottom of page 6 has charts showing combined U.S. carload and intermodal traffic. Total rail traffic (carloads, containers, and trailers combined) in 2011 through the third quarter was 91% of what it was through the third quarter of 2006, the peak year, as the chart below right shows.
U.S. Rail Traffic by Week: 52-Week Moving Average: January 2006 - September 2011
375,000 350,000
Carloads
YTD U.S. Rail Traffic Through September as a % of 2006 Levels

105% 100% 95% 90% 85%
87% 85% 100% 97%97% 100% 98% 96% 95% 92% 100% 97% 96%
325,000 300,000 275,000 250,000 225,000 200,000 175,000 150,000 2006 2007 2008 2009 2010 2011
91% 88%
Intermodal
80% 75% 70%
79%
80%
80%
'06 '07 '08 '09 '10 '11
'06 '07 '08 '09 '10 '11
'06 '07 '08 '09 '10 '11
Carloads
Intermodal
Combined
Data are based on non-seasonally adjusted originations and exclude the U.S. operations of CN and CP. Source: AAR Weekly Railroad Traffic
What are the latest numbers for Canadian railroads? On a non-seasonally adjusted basis, Canadian railroads originated 314,639 carloads of freight in September 2011, up 3.9% (11,929 carloads) over September 2010 and an average of 78,660 carloads per week (see top chart on the next page), the highest average since September 2008. Canadian figures include Canadian railroads U.S. operations.
Page 4 of 36
Canadian carloadings in the third quarter of 2011 were up 3.8% compared with the third quarter of 2010 (see the chart on the bottom left of page 9). In the first nine months of 2011, Canadian carloadings were up 2.8% compared with the same period in 2010. Canadian carloads in September 2011 were higher in 13 of the 20 commodity categories compared with September 2010. Commodities with gains in September included chemicals (up 4,697 carloads, or 11.5%); crushed stone and sand (up 3,150 carloads, or 29.7%); and farm products excluding grain (up 2,648 carloads, or 18.2%). Grain had the biggest carload decline in September (down 1,196 carloads, or 3.6%), followed by coal (down 924 carloads, or 2.8%). The table on page 8 has detailed commodity data for Canadian rail traffic in September 2011; the table on page 9 has commodity data for the third quarter of 2011. Canadian railroads also originated 202,907 intermodal containers and trailers in September 2011, an average of 50,727 units per week and down 0.1% from September 2010. Still, September 2011 was the fourth-highest intermodal month in history for Canadian railroads.
% Change in Total Canadian Rail Carloads From Same Month Previous Year: Jan. 2006 - Sept. 2011
40% 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% -25% -30% -35%
Avg. Weekly Canadian Rail Carloads: All Commodities

100,000 90,000 80,000 70,000
2011 2010 2006 (peak year)
60,000 50,000 40,000

2009
2008
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Data are weekly average originations for each month, include CN and CP (including their U.S. operations), and reflect revisions to original reporting. Source: AAR Weekly Railroad Traffic
2006
2007
2008
2009
2010
2011
Average Weekly Canadian Rail Intermodal Traffic

54,000
2007 2008 (peak year) 2011
% Change in Total Canadian Intermodal Traffic From Same Month Previous Year: Jan. 2006 - Sept. 2011
30% 25% 20% 15% 10%
September 2011 was down 0.1% from September 2010 and up 17.6% over September 2009.
50,000 46,000
2010
5% 0% -5% -10%
42,000 38,000
2009
-15% -20%
Jul Aug Sep Oct Nov Dec
34,000 Jan Feb Mar Apr May Jun

Data are based on originations, include CN and CP (including their U.S. operations), and reflect revisions to original reporting. Source: AAR Weekly Railroad Traffic
-25%
2006
2007
2008
2009
2010
2011
Seasonally adjusted total Canadian rail carloads in September 2011 were down 0.6% from August 2011 (see the middle left chart on page 19). Seasonally adjusted Canadian intermodal traffic in September 2011 was down 1.1% from August 2011 (see the middle right chart on page 19).
Page 5 of 36
U.S. RAIL TRAFFIC: SEPTEMBER 2011*

(4 weeks ending October 1, 2011) Difference '11-'10 '11-'09 -21,048 -16,849 -672 -2,333 -1,194 6,265 2,133 4,132 6,356 1,198 -290 1,367 121 9,079 3,649 -671 5,272 829 4,445 7,183 4,306 259 2,618 -133 -1,582 1,449 13,345 1,018 20,298 21,316 -5,540 -5,852 505 806 -999 16,767 9,573 7,194 31,011 3,769 -295 2,317 1,747 33,311 17,780 2,398 12,742 391 5,431 15,956 11,975 -1,204 5,185 -833 -1,442 609 99,872 7,968 149,456 157,424 % Change '11-'10 '11-'09 -13.1% -18.2% -15.2% -6.1% -4.6% 4.5% 1.9% 16.1% 1.2% 2.9% -4.6% 13.9% 0.5% 9.1% 11.7% -4.9% 14.4% 4.5% 8.2% 6.1% 6.2% 1.3% 9.2% -0.4% -10.4% 9.1% 1.1% 0.8% 2.5% 2.3% -3.8% -7.2% 15.6% 2.3% -3.9% 12.9% 8.9% 31.9% 6.0% 9.9% -4.6% 26.2% 7.6% 44.1% 104.6% 22.5% 43.6% 2.1% 10.2% 14.7% 19.5% -5.7% 19.9% -2.6% -9.6% 3.6% 9.1% 6.4% 22.4% 19.9%
Commodity Agricultural & food products Grain Farm products excl. grain Grain mill products (1) Food products Chemicals and petroleum Chemicals Petroleum & petr. products (2) Coal Forest products Primary forest products (3) Lumber & wood products Pulp & paper products Metallic ores and metals Metallic ores (4) Coke Primary metal products (5) Iron & steel scrap Motor vehicles & parts Nonmetallic minerals & prod. Crushed stone, gravel, sand Nonmetallic minerals (6) Stone, clay & glass prod. (7) Other Waste & nonferrous scrap (8) All other carloads TOTAL ALL CARLOADS Trailers Containers TOTAL ALL INTERMODAL
Sep 2011 139,696 75,581 3,746 35,701 24,668 146,940 117,171 29,769 544,088 41,836 6,063 11,175 24,598 108,916 34,783 13,042 41,960 19,131 58,660 124,542 73,259 20,096 31,187 30,993 13,612 17,381 1,195,671 132,466 817,140 949,606
Sep 2010 160,744 92,430 4,418 38,034 25,862 140,675 115,038 25,637 537,732 40,638 6,353 9,808 24,477 99,837 31,134 13,713 36,688 18,302 54,215 117,359 68,953 19,837 28,569 31,126 15,194 15,932 1,182,326 131,448 796,842 928,290
Sep 2009 145,236 81,433 3,241 34,895 25,667 130,173 107,598 22,575 513,077 38,067 6,358 8,858 22,851 75,605 17,003 10,644 29,218 18,740 53,229 108,586 61,284 21,300 26,002 31,826 15,054 16,772 1,095,799 124,498 667,684 792,182
(1) - flour, animal feed, corn syrup, corn starch, soybean meal, DDGs, etc. (2) - crude petroleum and all products of petroleum refining (liquefied gases, asphalt, fuel oil, lubricating oil, jet fuel, etc.) (3) - wood raw materials such as pulpwood and wood chips (4) - overwhelmingly iron ore, but some aluminum ore, copper ore, etc.
(6) - phosphate
(5) - primarily iron & steel; some aluminum, copper, etc. rock, rock salt, crude sulphur, clay, etc. (7) - cement, ground earths or minerals, gypsum, etc. (8) - scrap paper, construction debris, ashes, etc.
*Data are originations not seasonally adjusted. Includes BNSF, CSX, KCS, NS, UP, Birmingham Southern, Florida East Coast, Lake Superior & Ishpeming, and Paducah & Louisville. Excludes CN's and CP's U.S. operations. Source: AAR Week ly Railroad Traffic
Average Weekly U.S. Rail Traffic: Total Carloads + Intermodal Units

625,000 600,000 575,000 550,000 525,000 500,000 475,000 450,000 425,000 400,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Data are weekly average originations for each month, are not seasonally adjusted, exclude U.S. operations of CN and CP, and reflect revisions to original reporting. Source: AAR
% Change in U.S. Rail Carloads + Intermodal Units From Same Month Prev. Year: Jan. 2006 - Sept. 2011
20% 15% 10%
2006 (peak year)
2011 2008 2010 2009
5% 0% -5% -10% -15% -20% -25% 2006 2007 2008 2009 2010 2011
0.0%
Page 6 of 36
U.S. RAIL TRAFFIC: THIRD QUARTER 2011*

(13 weeks ending October 1, 2011) Commodity Agricultural & food products Grain Farm products excl. grain Grain mill products (1) Food products Chemicals and petroleum Chemicals Petroleum & petr. products (2) Coal Forest products Primary forest products (3) Lumber & wood products Pulp & paper products Metallic ores and metals Metallic ores (4) Coke Primary metal products (5) Iron & steel scrap Motor vehicles & parts Nonmetallic minerals & prod. Crushed stone, gravel, sand Nonmetallic minerals (6) Stone, clay & glass prod. (7) Other Waste & nonferrous scrap (8) All other carloads TOTAL ALL CARLOADS Trailers Containers TOTAL ALL INTERMODAL Q3 2011 453,982 243,520 10,650 120,583 79,229 479,452 384,610 94,842 1,680,751 135,677 19,984 35,817 79,876 359,193 119,685 44,764 133,682 61,062 167,880 411,735 241,638 68,138 101,959 101,253 44,152 57,101 3,789,923 419,841 2,605,252 3,025,093 Q3 2010 500,506 283,537 12,110 124,189 80,670 461,228 376,065 85,163 1,723,472 131,632 20,837 32,286 78,509 317,875 102,372 44,052 119,734 51,717 155,225 397,962 233,019 70,034 94,909 103,523 50,800 52,723 3,791,423 428,674 2,559,183 2,987,857 Q3 2009 472,165 261,057 10,126 119,086 81,896 434,079 357,458 76,621 1,688,473 126,574 21,627 30,370 74,577 240,896 57,385 37,290 90,131 56,090 143,415 364,595 203,805 70,217 90,573 104,740 50,880 53,860 3,574,937 399,312 2,131,401 2,530,713 Difference '11-'10 '11-'09 -46,524 -40,017 -1,460 -3,606 -1,441 18,224 8,545 9,679 -42,721 4,045 -853 3,531 1,367 41,318 17,313 712 13,948 9,345 12,655 13,773 8,619 -1,896 7,050 -2,270 -6,648 4,378 -1,500 -8,833 46,069 37,236 -18,183 -17,537 524 1,497 -2,667 45,373 27,152 18,221 -7,722 9,103 -1,643 5,447 5,299 118,297 62,300 7,474 43,551 4,972 24,465 47,140 37,833 -2,079 11,386 -3,487 -6,728 3,241 214,986 20,529 473,851 494,380 % Change '11-'10 '11-'09 -9.3% -14.1% -12.1% -2.9% -1.8% 4.0% 2.3% 11.4% -2.5% 3.1% -4.1% 10.9% 1.7% 13.0% 16.9% 1.6% 11.6% 18.1% 8.2% 3.5% 3.7% -2.7% 7.4% -2.2% -13.1% 8.3% 0.0% -2.1% 1.8% 1.2% -3.9% -6.7% 5.2% 1.3% -3.3% 10.5% 7.6% 23.8% -0.5% 7.2% -7.6% 17.9% 7.1% 49.1% 108.6% 20.0% 48.3% 8.9% 17.1% 12.9% 18.6% -3.0% 12.6% -3.3% -13.2% 6.0% 6.0% 5.1% 22.2% 19.5%
(5) - primarily iron & steel; some aluminum, copper, etc. (6) - phosphate rock, rock salt, crude sulphur, clay, etc. (7) - cement, ground earths or minerals, gypsum, etc. (8) - scrap paper, construction debris, ashes, etc.
% Change in Total U.S. Rail Carloads From Same Quarter Previous Year: Q1 2006 - Q3 2011
20% 15% 10% 5% 0% -5%
-0.04%
% Change in U.S. Intermodal Traffic From Same Quarter Previous Year: Q1 2006 - Q3 2011
20% 15% 10% 5% 0% -5% -10% -15% -20% -25%
-10% -15% -20% -25% 2006 2007 2008 2009 2010 2011
2006
2007
2008
2009
2010
2011
Page 7 of 36
CANADIAN RAIL TRAFFIC: SEPTEMBER 2011*

(4 weeks ending October 1, 2011) Commodity Agricultural & food products Grain Farm products excl. grain Grain mill products (1) Food products Chemicals and petroleum Chemicals Petroleum & petr. products (2) Coal Forest products Primary forest products (3) Lumber & wood products Pulp & paper products Metallic ores and metals Metallic ores (4) Coke Primary metal products (5) Iron & steel scrap Motor vehicles & parts Nonmetallic minerals & prod. Crushed stone, gravel, sand Nonmetallic minerals (6) Stone, clay & glass prod. (7) Other Waste & nonferrous scrap (8) All other carloads TOTAL ALL CARLOADS Trailers Containers TOTAL ALL INTERMODAL Sep 2011 63,632 32,028 17,167 5,791 8,646 64,186 45,555 18,631 32,540 30,413 5,874 10,770 13,769 68,044 51,285 2,575 10,241 3,943 21,336 27,197 13,769 7,017 6,411 7,291 2,295 4,996 314,639 6,126 196,781 202,907 Sep 2010 62,289 33,224 14,519 6,326 8,220 59,469 40,858 18,611 33,464 29,024 5,616 8,765 14,643 67,214 52,054 2,091 9,719 3,350 20,603 23,411 10,619 7,394 5,398 7,236 2,203 5,033 302,710 6,008 197,104 203,112 Sep 2009 62,630 36,836 11,668 6,001 8,125 50,326 34,110 16,216 31,001 27,748 6,371 8,195 13,182 55,643 43,341 2,162 7,367 2,773 17,524 22,426 10,550 6,191 5,685 7,201 2,653 4,548 274,499 6,775 165,771 172,546 Difference '11-'10 '11-'09 1,343 -1,196 2,648 -535 426 4,717 4,697 20 -924 1,389 258 2,005 -874 830 -769 484 522 593 733 3,786 3,150 -377 1,013 55 92 -37 11,929 118 -323 -205 1,002 -4,808 5,499 -210 521 13,860 11,445 2,415 1,539 2,665 -497 2,575 587 12,401 7,944 413 2,874 1,170 3,812 4,771 3,219 826 726 90 -358 448 40,140 -649 31,010 30,361 % Change '11-'10 '11-'09 2.2% -3.6% 18.2% -8.5% 5.2% 7.9% 11.5% 0.1% -2.8% 4.8% 4.6% 22.9% -6.0% 1.2% -1.5% 23.1% 5.4% 17.7% 3.6% 16.2% 29.7% -5.1% 18.8% 0.8% 4.2% -0.7% 3.9% 2.0% -0.2% -0.1% 1.6% -13.1% 47.1% -3.5% 6.4% 27.5% 33.6% 14.9% 5.0% 9.6% -7.8% 31.4% 4.5% 22.3% 18.3% 19.1% 39.0% 42.2% 21.8% 21.3% 30.5% 13.3% 12.8% 1.2% -13.5% 9.9% 14.6% -9.6% 18.7% 17.6%
*CN and CP, including their U.S. operations. Data are originations not seasonally adjusted. Source: AAR Week ly Railroad Traffic
Average Weekly Canadian Rail Traffic: Total Carloads + Intermodal Units

140,000
2007 (peak year)
% Change in Canadian Carloads + Intermodal Units From Same Month Prev. Year: Jan. 2006 - Sept. 2011
30% 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% -25% -30%
130,000 120,000
2011 2010
2008
110,000
2009
Data are weekly average originations for each month, are not seasonally adjusted, include CN and CP (including their U.S. operations), and reflect revisions to original reporting. Source: AAR
2006
2007
2008
2009
2010
2011
Page 8 of 36
CANADIAN RAIL TRAFFIC: THIRD QUARTER 2011*

(13 weeks ending October 1, 2011) Commodity Agricultural & food products Grain Farm products excl. grain Grain mill products (1) Food products Chemicals and petroleum Chemicals Petroleum & petr. products (2) Coal Forest products Primary forest products (3) Lumber & wood products Pulp & paper products Metallic ores and metals Metallic ores (4) Coke Primary metal products (5) Iron & steel scrap Motor vehicles & parts Nonmetallic minerals & prod. Crushed stone, gravel, sand Nonmetallic minerals (6) Stone, clay & glass prod. (7) Other Waste & nonferrous scrap (8) All other carloads TOTAL ALL CARLOADS Trailers Containers TOTAL ALL INTERMODAL Q3 2011 201,451 114,295 40,502 19,762 26,892 199,574 139,732 59,842 110,818 97,633 19,081 33,792 44,760 223,197 171,725 8,259 31,070 12,143 60,586 81,785 38,628 23,032 20,125 21,037 6,570 14,467 996,081 20,498 636,779 657,277 Q3 2010 203,168 116,741 39,142 19,858 27,427 184,676 126,354 58,322 109,070 94,988 18,500 28,880 47,608 212,786 163,985 8,215 30,518 10,068 61,118 74,112 34,994 21,619 17,499 20,152 6,103 14,049 960,070 20,216 636,196 656,412 Q3 2009 193,220 117,583 29,278 20,414 25,945 160,465 105,901 54,564 96,415 90,672 19,243 26,588 44,841 149,145 114,968 6,025 20,069 8,083 49,733 66,794 28,224 19,708 18,862 21,356 7,652 13,704 827,800 21,524 525,334 546,858 Difference '11-'10 '11-'09 -1,717 -2,446 1,360 -96 -535 14,898 13,378 1,520 1,748 2,645 581 4,912 -2,848 10,411 7,740 44 552 2,075 -532 7,673 3,634 1,413 2,626 885 467 418 36,011 282 583 865 8,231 -3,288 11,224 -652 947 39,109 33,831 5,278 14,403 6,961 -162 7,204 -81 74,052 56,757 2,234 11,001 4,060 10,853 14,991 10,404 3,324 1,263 -319 -1,082 763 168,281 -1,026 111,445 110,419 % Change '11-'10 '11-'09 -0.8% -2.1% 3.5% -0.5% -2.0% 8.1% 10.6% 2.6% 1.6% 2.8% 3.1% 17.0% -6.0% 4.9% 4.7% 0.5% 1.8% 20.6% -0.9% 10.4% 10.4% 6.5% 15.0% 4.4% 7.7% 3.0% 3.8% 1.4% 0.1% 0.1% 4.3% -2.8% 38.3% -3.2% 3.7% 24.4% 31.9% 9.7% 14.9% 7.7% -0.8% 27.1% -0.2% 49.7% 49.4% 37.1% 54.8% 50.2% 21.8% 22.4% 36.9% 16.9% 6.7% -1.5% -14.1% 5.6% 20.3% -4.8% 21.2% 20.2%
% Change in Total Canadian Rail Carloads From Same Quarter Previous Year: Q1 2006 - Q3 2011
30% 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% -25% -30% 2006 2007 2008 2009 2010
% Change in Canadian Intermodal Traffic From Same Quarter Previous Year: Q1 2006 - Q3 2011
25% 20% 15% 10% 5% 0% -5% -10% -15% -20% -25%
0.1%
-0.1%
2011
2006
2007
2008
2009
2010
2011
Page 9 of 36
COMBINED U.S. AND CANADIAN RAIL TRAFFIC: SEPTEMBER 2011*

(4 weeks ending October 1, 2011) Commodity Agricultural & food products Grain Farm products excl. grain Grain mill products (1) Food products Chemicals and petroleum Chemicals Petroleum & petr. products (2) Coal Forest products Primary forest products (3) Lumber & wood products Pulp & paper products Metallic ores and metals Metallic ores (4) Coke Primary metal products (5) Iron & steel scrap Motor vehicles & parts Nonmetallic minerals & prod. Crushed stone, gravel, sand Nonmetallic minerals (6) Stone, clay & glass prod. (7) Other Waste & nonferrous scrap (8) All other carloads TOTAL ALL CARLOADS Trailers Containers TOTAL ALL INTERMODAL Sep 2011 203,328 107,609 20,913 41,492 33,314 211,126 162,726 48,400 576,628 72,249 11,937 21,945 38,367 176,960 86,068 15,617 52,201 23,074 79,996 151,739 87,028 27,113 37,598 38,284 15,907 22,377 1,510,310 138,592 1,013,921 1,152,513 Sep 2010 223,033 125,654 18,937 44,360 34,082 200,144 155,896 44,248 571,196 69,662 11,969 18,573 39,120 167,051 83,188 15,804 46,407 21,652 74,818 140,770 79,572 27,231 33,967 38,362 17,397 20,965 1,485,036 137,456 993,946 1,131,402 Sep 2009 207,866 118,269 14,909 40,896 33,792 180,499 141,708 38,791 544,078 65,815 12,729 17,053 36,033 131,248 60,344 12,806 36,585 21,513 70,753 131,012 71,834 27,491 31,687 39,027 17,707 21,320 1,370,298 131,273 833,455 964,728 Difference '11-'10 '11-'09 -19,705 -18,045 1,976 -2,868 -768 10,982 6,830 4,152 5,432 2,587 -32 3,372 -753 9,909 2,880 -187 5,794 1,422 5,178 10,969 7,456 -118 3,631 -78 -1,490 1,412 25,274 1,136 19,975 21,111 -4,538 -10,660 6,004 596 -478 30,627 21,018 9,609 32,550 6,434 -792 4,892 2,334 45,712 25,724 2,811 15,616 1,561 9,243 20,727 15,194 -378 5,911 -743 -1,800 1,057 140,012 7,319 180,466 187,785 % Change '11-'10 '11-'09 -8.8% -14.4% 10.4% -6.5% -2.3% 5.5% 4.4% 9.4% 1.0% 3.7% -0.3% 18.2% -1.9% 5.9% 3.5% -1.2% 12.5% 6.6% 6.9% 7.8% 9.4% -0.4% 10.7% -0.2% -8.6% 6.7% 1.7% 0.8% 2.0% 1.9% -2.2% -9.0% 40.3% 1.5% -1.4% 17.0% 14.8% 24.8% 6.0% 9.8% -6.2% 28.7% 6.5% 34.8% 42.6% 22.0% 42.7% 7.3% 13.1% 15.8% 21.2% -1.4% 18.7% -1.9% -10.2% 5.0% 10.2% 5.6% 21.7% 19.5%
(5) - primarily iron & steel; some aluminum, copper, etc. rock, rock salt, crude sulphur, clay, etc. (7) - cement, ground earths or minerals, gypsum, etc. (8) - scrap paper, construction debris, ashes, etc.
(6) - phosphate
*Data are originations and are not seasonally adjusted. Source: AAR Week ly Railroad Traffic
Average Weekly U.S. + Canadian Rail Traffic: Total Carloads + Intermodal Units
750,000 725,000 700,000 675,000 650,000 625,000 600,000 575,000 550,000 525,000 500,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Data are weekly average originations for each month, are not seasonally adjusted, and reflect revisions to original reporting. Source: AAR Weekly Railroad Traffic
% Change in Combined U.S. + Canadian Rail Carloads + Intermodal Units From Same Month Prev. Year: January 2006 - September 2011
20% 15% 10%
2006 (peak year)
2011
5% 0%
2008
-5% -10% -15% -20% -25% -30% 2006 2007 2008 2009 2010 2011
2010
2009
Page 10 of 36
COMBINED U.S. AND CANADIAN RAIL TRAFFIC: THIRD QUARTER 2011*

(13 weeks ending October 1, 2011) Commodity Agricultural & food products Grain Farm products excl. grain Grain mill products (1) Food products Chemicals and petroleum Chemicals Petroleum & petr. products (2) Coal Forest products Primary forest products (3) Lumber & wood products Pulp & paper products Metallic ores and metals Metallic ores (4) Coke Primary metal products (5) Iron & steel scrap Motor vehicles & parts Nonmetallic minerals & prod. Crushed stone, gravel, sand Nonmetallic minerals (6) Stone, clay & glass prod. (7) Other Waste & nonferrous scrap (8) All other carloads TOTAL ALL CARLOADS Trailers Containers TOTAL ALL INTERMODAL Q3 2011 655,433 357,815 51,152 140,345 106,121 679,026 524,342 154,684 1,791,569 233,310 39,065 69,609 124,636 582,390 291,410 53,023 164,752 73,205 228,466 493,520 280,266 91,170 122,084 122,290 50,722 71,568 4,786,004 440,339 3,242,031 3,682,370 Q3 2010 703,674 400,278 51,252 144,047 108,097 645,904 502,419 143,485 1,832,542 226,620 39,337 61,166 126,117 530,661 266,357 52,267 150,252 61,785 216,343 472,074 268,013 91,653 112,408 123,675 56,903 66,772 4,751,493 448,890 3,195,379 3,644,269 Q3 2009 665,385 378,640 39,404 139,500 107,841 594,544 463,359 131,185 1,784,888 217,246 40,870 56,958 119,418 390,041 172,353 43,315 110,200 64,173 193,148 431,389 232,029 89,925 109,435 126,096 58,532 67,564 4,402,737 420,836 2,656,735 3,077,571 Difference '11-'10 '11-'09 -48,241 -42,463 -100 -3,702 -1,976 33,122 21,923 11,199 -40,973 6,690 -272 8,443 -1,481 51,729 25,053 756 14,500 11,420 12,123 21,446 12,253 -483 9,676 -1,385 -6,181 4,796 34,511 -8,551 46,652 38,101 -9,952 -20,825 11,748 845 -1,720 84,482 60,983 23,499 6,681 16,064 -1,805 12,651 5,218 192,349 119,057 9,708 54,552 9,032 35,318 62,131 48,237 1,245 12,649 -3,806 -7,810 4,004 383,267 19,503 585,296 604,799 % Change '11-'10 '11-'09 -6.9% -10.6% -0.2% -2.6% -1.8% 5.1% 4.4% 7.8% -2.2% 3.0% -0.7% 13.8% -1.2% 9.7% 9.4% 1.4% 9.7% 18.5% 5.6% 4.5% 4.6% -0.5% 8.6% -1.1% -10.9% 7.2% 0.7% -1.9% 1.5% 1.0% -1.5% -5.5% 29.8% 0.6% -1.6% 14.2% 13.2% 17.9% 0.4% 7.4% -4.4% 22.2% 4.4% 49.3% 69.1% 22.4% 49.5% 14.1% 18.3% 14.4% 20.8% 1.4% 11.6% -3.0% -13.3% 5.9% 8.7% 4.6% 22.0% 19.7%
*Data are originations and are not seasonally adjusted. Source: AAR Week ly Railroad Traffic
% Change in Total U.S. + Canadian Rail Carloads From Same Quarter Previous Year: Q1 2006 - Q3 2011
20% 15% 10% 5% 0% -5% -10% -15% -20% -25% 2006 2007 2008 2009 2010 2011
Data are based on originations and are not seasonally adjusted. Source: AAR Weekly Railroad Traffic
% Change in Total U.S. + Canadian Intermodal Traffic From Same Quarter Previous Year: Q1 2006 - Q3 2011
20% 15% 10% 5% 0% -5% -10% -15% -20% -25% 2006 2007 2008 2009 2010 2011
Data are based on originations and are not seasonally adjusted. Source: AAR Weekly Railroad Traffic
Page 11 of 36
COAL U.S. railroads originated 544,088 carloads of coal in September 2011, up 1.2% over September 2010 and the first year-over-year monthly increase since March 2011. Seasonally adjusted coal carloads in September 2011 were up 2.7% over August 2011. The chart below left shows U.S. rail coal carloads on a 52-week rolling average basis coal carloads have a long way to go to get back to where they were. The chart on the bottom right shows that U.S. net electricity generation from coal has been lower each month in 2011 than in the comparable month in 2010, a fact that doesnt help rail coal carloads.
Average Weekly U.S. Rail Carloads of Coal
160,000
2008 (peak year)
% Change in U.S. Rail Carloads of Coal From Same Month Previous Year: Jan. 2006 - Sept. 2011
15% 10% 5% 0%
150,000
140,000
2007
130,000
2010
-5%
2009
120,000
2011
-10% -15% Jul Aug Sep Oct Nov Dec -20%
110,000 Jan Feb Mar Apr May Jun 2006 2007 2008 2009 2010 2011
Data are weekly average originations for each month, are not seasonally adjusted, exclude U.S. operations of CN and CP, and reflect revisions to original reporting. Source: AAR Data are based on originations, are not seasonally adjusted, exclude U.S. operations of CN and CP, and reflect revisions to original reporting. Source: AAR Weekly Railroad Traffic
Avg. Weekly Canadian Rail Carloads of Coal

10,000
2011 2007
% Change in Canadian Carloads of Coal From Same Month Previous Year: Jan. 2006 - Sept. 2011
60% 50% 40% 30% 20% 10% 0%
9,000 8,000 7,000

2010
6,000
2009 2008
-10% -20% -30% -40%
Data are weekly average originations for each month, are not seasonally adjusted, include CN and CP (including their U.S. operations), and reflect revisions to original reporting. Source: AAR
2006
2007
2008
2009
2010
2011
Weekly U.S. Coal Carloads: 52-Week Moving Average January 2006 - September 2011
155,000 150,000 145,000 140,000 135,000 130,000 125,000 120,000 115,000 110,000 2006 2007 2008 2009 2010 2011
U.S. Electricity Generation From Coal

(Million Megawatthours)
190 180
2008
170
2011
2010
160 150 140

2009
130 120 Jan Feb Mar Apr May Jun

Source: Energy Information Administration
Jul
Aug Sep Oct Nov Dec
Page 12 of 36
CHEMICALS U.S. railroads originated 117,171 carloads of chemicals in September 2011, an average of 29,293 per week and up 1.9% over September 2010. U.S. chemical carloads in the third quarter were up 2.3% over the third quarter of 2010, down from gains of 7.0% in the first quarter and 3.3% in the second quarter. The middle charts below show that 2011 has been the best year ever for chemical carloadings for Canadian railroads. The chart on the bottom left shows that the 52-week moving average for U.S. chemical carloadings is not far from its mid-2008 peak.
Avg. Weekly U.S. Rail Carloads of Chemicals
33,000 32,000 31,000 30,000 29,000 28,000 27,000 26,000 25,000 24,000 23,000 22,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
% Change in U.S. Rail Carloads of Chemicals From Same Month Previous Year: Jan. 2006 - Sept. 2011
20% 15% 10%
2011 2007 (peak year)
2010
5% 0% -5%
2009 2008
-10% -15% -20% -25% 2006 2007 2008 2009 2010 2011
Avg. Weekly Canadian Rail Carloads of Chemicals

13,000 12,000 11,000 10,000
2010 2011
% Change in Canadian Carloads of Chemicals From Same Month Previous Year: Jan. 2009 - Sept. 2011
60% 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% -50% 2009
9,000 8,000 7,000 6,000 Jan Feb Mar Apr May Jun
2009
2008
2010
2011
Data are weekly average originations for each month, are not seasonally adjusted, include CN and CP (including their U.S. operations), and reflect revisions to original reporting. Due to data revisions, data prior to 2008 are not available. Source: AAR
Data are based on originations, are not seasonally adjusted, include CN and CP (including their U.S. operations), and reflect revisions to original reporting. Due to comparability issues, data prior to 2009 are not available. Source: AAR Weekly Railroad Traffic
Weekly U.S. Chemical Carloads: 52-Week Moving Avg. January 2006 - September 2011
33,000 32,000 31,000 30,000 29,000 28,000 27,000 26,000 25,000 24,000 23,000 2006 2007 2008 2009 2010 2011
U.S. Industrial Production of Chemicals vs. U.S. Rail Carloads of Chemicals

110 105 100 95 90 85 80 75 2006 2007 2008 2009 2010 2011
Industrial production chemicals (left scale, Jan. 2006=100) correlation = 68% Rail carloads of chemicals (right scale)
33,000 31,000 29,000 27,000 25,000 23,000 21,000 19,000
Data are seasonally adjusted. Carloads are weekly averages. Source: Federal Reserve, AAR
Page 13 of 36
GRAIN U.S. grain carloads in September 2011 fell 18.2% from September 2010, following year-over-year declines of 17.1% in August 2011 and 5.7% in July 2011. The 52-week average for U.S. rail grain carloads had been rising from mid-2009 to mid-2011, but its since turned down (see chart bottom left). Over the years there has been a pronounced trend toward more efficient grain movements. Single car movements (typically defined as 15 cars) accounted for 36% of total U.S. grain carloads in 1985; in 2009 it was 13%. Unit trains (50+ cars) rose from 34% in 1985 to 62% in 2009 (see chart bottom right).
Average Weekly U.S. Rail Carloads of Grain

28,000
2007
% Change in U.S. Rail Carloads of Grain From Same Month Previous Year: Jan. 2006 - Sept. 2011
30% 20%
26,000 24,000
2010
10% 0%
22,000 20,000
2008
-10% -20% -30%

September 2011 was down 18.2% from September 2010 and down 7.2% from September 2009.
18,000
2009 2011
16,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2006
2007
2008
2009
2010
2011
Average Weekly Canadian Rail Carloads of Grain

12,000 11,000
2010
% Change in Canadian Carloads of Grain From Same Month Previous Year: Jan. 2006 - Sept. 2011
30% 20%
September 2011 was down 3.6% from September 2010 and down 13.1% from September 2009.
10,000 9,000
2009
10% 0%
8,000
2011
2007 2008
-10% -20%
7,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2006 2007 2008 2009 2010 2011
Data are weekly average originations for each month, are not seasonally adjusted, include CN and CP (including their U.S. operations), and reflect revisions to original reporting. Source: AAR Data are weekly average originations for each month, include CN and CP (including their U.S. operations), and reflect revisions to original reporting. Source: AAR Weekly Railroad Traffic
Weekly U.S. Grain Carloads: 52-Week Moving Avg. January 2006 - September 2011
27,000 26,000 25,000 24,000 23,000 22,000 21,000 20,000 19,000 18,000 17,000 2006 2007 2008 2009 2010 2011
Rail Grain Tonnage by Movement Type

70% 60% 50% 40% 30% 20%
2005 2005 2000 2009 2005 1985 1990 1995 2000 2009 1990 1995 1985 1990 1995 1985 2000 2009
The percentage of U.S. rail grain traffic moving in highly efficient unit trains has been increasing over the years, reaching 62% in 2009.
10% 0%
Single Cars (1-5 cars)

Source: STB Waybill Sample
Multiple Cars (6-49 cars)
Unit Trains (50+ cars)
Page 14 of 36
CARLOAD AND INTERMODAL TOTALS

U.S. Rail Carload Traffic: Jan. 2006 - Sept. 2011
375,000 350,000 325,000 300,000 275,000 250,000 225,000 200,000 175,000 150,000 2006 2007 2008 2009 2010 2011 125,000 100,000 225,000 200,000 175,000 150,000
U.S. Rail Intermodal Traffic: Jan. 2006 - Sept. 2011

275,000 250,000
2006
2007
2008
2009
2010
2011
Data are weekly average originations for each month, are not seasonally adjusted, and exclude U.S. operations of CN and CP. Source: AAR Weekly Railroad Traffic
Data are weekly average originations for each month, are not seasonally adjusted, and exclude U.S. operations of CN and CP. Source: AAR Weekly Railroad Traffic
ALL COMMODITIES EXCLUDING COAL

% Change in U.S. Rail Carloads Excluding Coal From Same Month Previous Year: Jan. 2006 - Sept. 2011
30% 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% -25% -30% -35% 210,000 200,000
September 2011 was up 1.1% over September 2010 and up 11.8% over September 2009. 2006 (peak year)
Average Weekly U.S. Rail Carloads: All Commodities Excluding Coal
190,000 180,000 170,000 160,000 150,000 140,000 130,000 120,000 110,000

2009 2010 2011 2008
2006
2007
2008
2009
2010
2011
Jan Feb Mar Apr May Jun
ALL COMMODITIES EXCLUDING COAL AND GRAIN

Average Weekly U.S. Rail Carloads: All Commodities Excluding Coal and Grain
% Change in U.S. Rail Carloads Excl. Coal and Grain From Same Month Prev. Year: Jan. 2006 - Sept. 2011
30% 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% -25% -30% -35%
2006 (peak year)
2011 2008 2010
2009
2006
2007
2008
2009
2010
2011
Page 15 of 36
INDUSTRIAL PRODUCTS
Avg. Weekly U.S. Rail Carloads: Industrial Products
130,000
2006 (peak year)
% Change in U.S. Rail Carloads of Industrial Products From Same Month Prev. Year: Jan. 2006 - Sept. 2011*
35% 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% -25% -30% -35% -40%
120,000 110,000 100,000 90,000 80,000 70,000

2009 2010 2011 2008
Data include chemicals; paper; metal products; autos; crushed stone and gravel; metallic ores; and stone and glass products. Data are weekly average originations for each month and exclude the U.S. operations of CN and CP. Source: AAR Weekly Railroad Traffic
2006
2007
2008
2009
2010
2011
*Data include chemicals; paper; metal products; autos; crushed stone and gravel; metallic ores; and stone and glass products. Data are weekly average originations for each month and exclude the U.S. operations of CN and CP. Source: AAR Weekly Railroad Traffic
PRIMARY METAL PRODUCTS (MAINLY IRON AND STEEL)

Average Weekly U.S. Rail Carloads of Steel and Other Primary Metal Products
14,000
2007
% Change in U.S. Rail Carloads of Steel and Other Primary Metal Products From Same Month Previous Year: Jan. 2006 - Sept. 2011
100% 80% 60%
12,000 10,000 8,000 6,000 4,000 2,000
2011 2008 2010 2009
40% 20% 0% -20% -40% -60%
-80%
2006
2007
2008
2009
2010
2011
IRON AND STEEL SCRAP

Average Weekly U.S. Rail Carloads of Iron and Steel Scrap
7,000 120% 6,000
2010 2011
% Change in U.S. Rail Carloads of Iron and Steel Scrap From Same Month Previous Year: Jan. 2009 - Sept. 2011
100%
2008
80% 60% 40% 20% 0% -20%
5,000 4,000 3,000

2009
-40% -60% Jul Aug Sep Oct Nov Dec -80% 2009 2010 2011
Data are based on originations, are not seasonally adjusted and exclude U.S. operations of CN and CP. Data prior to 2009 are not available. Source: AAR Weekly Railroad Traffic
2,000 Jan Feb Mar Apr May Jun

Data are weekly average originations for each month, are not seasonally adjusted, and exclude U.S. operations of CN and CP. Data prior to 2008 are not available. Source: AAR
Page 16 of 36
PETROLEUM & PETROLEUM PRODUCTS (LPGs, ASPHALT, FUEL OIL, LUBRICATING OILS, ETC.)
Average Weekly U.S. Rail Carloads of Petroleum and Petroleum Products
7,500
2011
% Change in U.S. Rail Carloads of Petroleum and Petroleum Products From Same Month Previous Year: Jan. 2009 - Sept. 2011
25% 20% 15%
7,000 6,500
2010
2008
10% 5% 0%
2009
6,000 5,500 5,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Data are weekly average originations for each month, are not seasonally adjusted, and exclude U.S. operations of CN and CP. Data prior to 2008 are not available. Source: AAR
-5% -10% -15% -20% 2009 2010 2011

Data are based on originations, are not seasonally adjusted and exclude U.S. operations of CN and CP. Data prior to 2009 are not available. Source: AAR Weekly Railroad Traffic
CRUSHED STONE, SAND, AND GRAVEL

Average Weekly U.S. Rail Carloads of Crushed Stone, Sand, and Gravel
2011 2010 2008 2006 (peak year)
% Change in U.S. Rail Carloads of Crushed Stone, Sand, and Gravel From Same Month Previous Year: Jan. 2006 - Sept. 2011
30% 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% -25% -30% -35%
2009
2006
2007
2008
2009
2010
2011
MOTOR VEHICLES AND PARTS

Combined U.S. + Canadian Average Weekly Rail Carloads of Motor Vehicles*
35,000 32,000 29,000 26,000 23,000 20,000 17,000 14,000 11,000 8,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -80% 2006 2007 2008 2009 2010 2011
*Includes parts. Data are weekly average originations for each month, are not seasonally adjusted, and reflect revisions to original reporting. Source: AAR Weekly Railroad Traffic *Includes parts. Data are weekly average originations for each month, are not seasonally adjusted, and reflect revisions to original reporting. Source: AAR Weekly Railroad Traffic
% Change in Combined U.S. + Canadian Rail Carloads of Motor Vehicles* From Same Month Previous Year: Jan. 2006 - Sept. 2011
80% 60% 40%
2007
2008
20%
2011 2010
0%
2009
-20% -40% -60%
Page 17 of 36
METALLIC ORES (OVERWHELMINGLY IRON ORE)

Combined U.S. + Canadian Avg. Weekly Rail Carloads of Metallic Ores
26,000 24,000 22,000 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000
2007 2011
% Change in Combined U.S. + Canadian Rail Carloads of Metallic Ores From Same Month Previous Year: Jan. 2006 - Sept. 2011
220% 200% 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% -20% -40% -60% -80%
2010 2008 2009
2006
2007
2008
2009
2010
2011
LUMBER AND WOOD PRODUCTS + PRIMARY FOREST PRODUCTS

Combined U.S. + Canadian Average Weekly Rail Carloads of Lumber and Primary Forest Products
16,000 14,000
2007
% Change in Combined U.S. + Canadian Rail Carloads of Lumber and Primary Forest Products From Same Month Previous Year: Jan. 2006 - Sept. 2011
30% 20% 10% 0%
12,000 10,000 8,000 6,000
2008 2011
2010
-10% -20%
2009
-30% -40% 2006 2007 2008 2009 2010 2011
Data are weekly average originations for each month, are not seasonally adjusted, and reflect revisions to original reporting. Source: AAR Weekly Railroad Traffic Data are weekly average originations for each month, are not seasonally adjusted, and reflect revisions to original reporting. Source: AAR Weekly Railroad Traffic
PULP AND PAPER PRODUCTS

Combined U.S. + Canadian Average Weekly Rail Carloads of Pulp and Paper Products
14,000 13,000
2007
% Change in Combined U.S. + Canadian Rail Carloads of Pulp and Paper Products From Same Month Previous Year: Jan. 2006 - Sept. 2011
15% 10% 5% 0%
12,000 11,000
2011 2008 2010
-5% -10% -15%

10,000 9,000
2009
-20% -25% -30%
2006
2007
2008
2009
2010
2011
Page 18 of 36
SEASONALLY ADJUSTED RA TRAFFIC S AIL C
Rail Time Indicators October 7, 2011 c
Page 19 of 36 9
SEASON NALLY ADJU USTED RAIL TRAFFIC, c L cont.
Where to go for more information o e n: Weekly AAR press releases on railroad traffic are ava W p s t ailable on the AAR web site here. For a e sa ample copy of an AAR We o eekly Railroad Traffic repor e-mail Pau Posey at pp d rt, ul posey@aar.or rg. Weekly Railroa Traffic is fr to AAR members and a W ad ree m available by s subscription to others.
Rail Time Indicators Oc I ctober 7, 2011
Page 20 of 36 0
GROSS DOMESTIC PRODUCT (GDP)

Who releases it and when? U.S. Bureau of Economic Analysis (BEA), measured quarterly and revised several times as better data become available.
What is it and why is it important? GDP (the output of goods and services produced by labor and property in a country) measures the size of an economy and how fast its growing. Assuming its measured accurately, its probably the single most conclusive piece of information on the health of an economy. The GDP figure that gets all the press is the annualized percentage change in inflation-adjusted GDP from one quarter to the next i.e., take the percentage change in inflation-adjusted GDP from one quarter to the next and multiply by four. YOY % Change in U.S. Rail Traffic* vs. YOY % Change GDP and freight rail traffic have historically been closely correlated, although rail freight traffic tends to be much more volatile than the economy as a whole. The chart at right shows the percentage change in rail traffic (horizontal axis) versus year-over-year (note: not quarter to quarter) real GDP growth. The correlation isnt perfect the dots would have to be in a straight line for that but its still pretty close.
in Same Quarter's Real GDP: Q1 1990 - Q2 2011
8% 6%
YOY % Change in GDP
4% 2% 0% -25% -2% -4% -6%

YOY % Change in Rail Traffic trend line
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
What are the latest numbers?
*Average weekly carloads + intermodal units. Each dot represents one quarter. Data are seasonally adjusted. Source: AAR, Bureau of Economic Analysis
On September 29, the BEA released its third preliminary estimate of Q2 2011 GDP. The revised figure was only $11 billion higher than the second estimate from a month ago, but it was enough to increase GDP growth for the second quarter to 1.3% from the previous Quarterly Real U.S. GDP Growth: Q1 2004 Q4 2011 estimate of 1.0%. Thats the good (annualized % change from previous quarter) news. The bad news is that 1.3% 6% growth is still terrible, especially for Actual 4% this point in a recovery.
2% The consensus view of the latest Wall Street Journal survey of leading 0% economists, published on September -2% 16, is reflected in the chart at right. -4% The panel lowered its expectations Estimates for Q3 2011 and Q4 2011 again for the rest of the year. The are the consensus forecast by around -6% 50 leading economists surveyed by The consensus now is that GDP growth Wall Street Journal in early September -8% 2011. Q2 2011 is preliminary. will be 2.0% in Q3 2011 and 2.1% in -10% Q4 2011. One in three panel 2004 2007 2005 2006 2008 2009 2010 members thinks the U.S. economy will Source: Bureau of Economic Analysis, Wall Street Journal forecasters fall into a recession sometime in the next 12 months. Thats the highest odds the panel has given to a double dip recession since the recovery began. The panels consensus as of September is that full year 2012 GDP growth will be 2.6%.
Forecast
2011
The International Monetary Fund isnt even that confident. Its September 2011 World Economic Outlook is subtitled Slowing Growth, Rising Risks. In the report, the IMF says, The global economy is in a dangerous new phase. Global activity has weakened and become more uneven, confidence has fallen sharply recently, and downside risks are growing. Real GDP in the
Page 21 of 36
advanced economies is projected to expand at an anemic pace of about 1.5% in 2011 and 2 percent in 2012. The IMF sees U.S. GDP growth of 1.5% in 2011 and 1.8% in 2012 down from its June 2011 forecast of 2.5% in 2011 and 2.7% in 2012. As if to prove that he can be just as gloomy as the IMF, Federal Reserve Board Chairman Ben Bernanke testified before Congress on October 4 that the recovery is close to faltering. He said, Consumer behavior has both reflected and contributed to the slow pace of recovery. Households have been very cautious in their spending decisions, as declines in house prices and in the values of financial assets have reduced household wealth, and many families continue to struggle with high debt burdens or reduced access to credit. Probably the most significant factor depressing consumer confidence, however, has been the poor performance of the job market. Bernanke said recent financial turmoil in the U.S. was due in part to the recent controversy over raising the federal debt limit and the downgrade of the U.S. long-term credit rating. He also noted that concerns about sovereign debt in Greece and other European countries, as well as about the sovereign debt exposures of the European banking system, have added major stress to global financial markets and pose ongoing risks to growth both in Europe and elsewhere. The IMF made this point too. The news isnt all bad, however. The New York Yankees are out of the playoffs and the Green Bay Packers are, so far at least, looking like they could be heading back to the Super Bowl.
Where to go for more information: The most recent BEA news release on GDP, including links to detailed data tables, is here. BEA will release its first estimate of third quarter 2011 GDP on October 27. It will be subject to potentially large revisions, so some caution is in order. Ben Bernankes October 4 testimony before Congress is here. The IMFs September 2011 World Economic Outlook is here.
PURCHASING MANAGERS INDEX (PMI) and NON-MANUFACTURING INDEX (NMI)

Who releases it and when? Institute for Supply Management (ISM formerly the National Association of Purchasing Managers), on the first (PMI) and third (NMI) business days of each month.
What is it and why is it important? The PMI combines data on new orders, inventory, production, supplier deliveries, and employment. It is based on a survey of several hundred supply managers at manufacturers throughout the country. Supply managers typically handle purchasing/procurement, inventory control and management, and physical distribution and warehousing. The PMI is considered an indicator both of actual on-the-ground conditions as well as near- to medium-term sentiment. The NMI is like the PMI, except that it tracks services. Manufacturing accounts for around 12% of U.S. GDP not as much as it used to, but the U.S. is still by far the worlds top manufacturer. Much of what railroads haul, of course, consists of raw materials for manufacturing or finished manufactured goods. Services account for around twothirds of U.S. GDP and around 80% of private-sector employment. According to the ISM, a PMI > 50 indicates that overall manufacturing is expanding; a PMI < 50 indicates that manufacturing is contracting. Also according to the ISM, a PMI greater than 41.2, over time, generally indicates an expansion of the overall economy. Likewise, an NMI < 50 indicates the non-manufacturing sector is generally contracting; an NMI > 50 indicates that the non-manufacturing sector is generally expanding.
What are the latest numbers? The PMI rose for only the second time in seven months in September 2011 it was 51.6, up from 50.6 in August 2011. Thats still in the manufacturing is expanding category, where its been for 26 straight months. The new orders component of PMI remained at 49.6 in
Page 22 of 36
Purchasing Managers Index (PMI): January 2006 - September 2011

70 65 60 55 50 45 40 35 30 25 20 2006 2005 2007 2006 2008 2007 2009 2008 2010 2009 2011 2010
Data are seasonally adjusted. Source: Institute for Supply Management
recession
Non-Manufacturing Index (NMI): January 2008 - September 2011

70 65 60
New orders
New orders component
55 50 45 40 35
Overall PMI (> 50 = manuf. is expanding) (< 50 = manuf. is contracting)
30 25 20 2008
Overall NMI (> 50 = non-manuf. is expanding) (< 50 = non-manuf. is contracting)
2009
2010
2011
Data are seasonally adjusted. Source: Institute for Supply Management
September, the same as in August. Of the 18 manufacturing industries tracked by the ISM, 12 reported growth in September 2011, up from 10 in July and August 2011 (see table below). Regarding the September PMI, the ISM said: Comments from respondents generally reflect concern over the sluggish economy, political and policy uncertainty in Washington, and forecasts of ongoing high unemployment that will continue to put pressure on demand for manufactured products. No surprise there. The ISM also said that the past relationship between the PMI and the overall economy indicates that the average PMI for January through September (56.2) corresponds to a 4.8% increase in real GDP. Theres no way GDP is growing that fast, but that only means the PMI isnt a perfect gauge of the economy. That doesnt mean its not a useful indicator, since no indicator is a perfect gauge of the economy.
Industries Reporting Growth, Contraction, or No Change From Previous Month According to ISM
Manufacturing Sector Apparel, leather & related Chemicals Computers & electronics Electr. equip. & appliances Fabricated metal products Food, beverage & tobacco Furniture & related Machinery Miscellaneous mfg. Nonmetallic minerals Paper products Petroleum & coal Plastics & rubber Primary metals Printing & related activities Textile mills Transportation equipment Wood products Total Growing Total Contracting Total No Change Aug 10 Up Up Up Up Up Up Down Down Up Down Up Down Down Up Up Same Up Same 11 5 2 Sep 10 Up Up Up Up Up Up Up Up Up Down Up Same Up Up Down Same Up Down 13 3 2 Oct 10 Up Up Up Up Up Up Down Up Up Down Up Up Up Up Up Same Up Same 14 2 2 Nov 10 Up Up Up Up Up Down Down Up Down Down Down Up Up Up Down Same Up Same 10 6 2 Dec 10 Up Up Up Up Up Up Same Up Down Down Down Same Up Up Down Up Up Same 11 4 3 Jan 11 Up Up Up Up Up Up Up Up Up Down Up Up Down Up Down Down Up Up 14 4 0 Feb 11 Up Up Up Up Up Up Down Up Up Down Up Up Down Down Up Up Up Up 14 4 0 Mar 11 Up Up Up Up Up Up Up Up Up Up Up Up Up Down Up Up Up Down 16 2 0 Apr 11 Up Up Up Up Up Up Down Up Up Up Up Up Up Up Up Up Up Up 17 1 0 May 11 Up Up Up Up Up Down Down Up Up Up Up Up Up Up Down Up Up Down 14 4 0 Jun 11 Down Up Up Up Up Down Down Up Up Up Up Up Down Down Up Up Up Down 12 6 0 Jul 11 Down Down Up Down Up Down Up Down Same Up Up Up Down Up Up Down Up Up 10 7 1 Aug 11 Down Up Up Down Up Up Same Up Up Down Up Up Down Down Same Down Up Up 10 6 2 Sep 11 Up Up Up Down Down Up Down Up Up Up Down Up Up Down Up Down Up Up 12 6 0
"Up" = sector grew in month; "Down" = sector contracted in month; "Same" = no change in month
Source: Institute for Supply Management
In the section on GDP earlier we said that the IMF and others expect economic growth in Europe in the near term to be slow at best, with a recession there certainly possible. One of the indicators leading some to believe that a recession in Europe may be imminent is the European version of the PMI, which recently fell below 50 for the first time since July 2009.
Page 23 of 36
The ISMs non-manufacturing index (NMI), which covers service industries, fell to 53.0 in September 2011 from 53.3 in August 2011 (see the chart on the top right of the previous page). Even though it was a decline, it wasnt as much of a decline as many had feared, so many analysts counted it as good news and it helped push stocks higher the day it came out. The new orders component of the NMI rose to 56.5 in September from 52.8 in August, reaching its highest point in four months.
Where to go for more information: The ISMs press release on the September PMI is here. The October PMI will be released on November 1. The ISMs press release on the September NMI is here. The October NMI will be released on November 3.
MANUFACTURING INVENTORIES AND SALES

Who releases it and when? The U.S. Census Bureau, at the beginning of each month.
What is it and why is it important? The report is based on data reported from manufacturing establishments with $500 million or more in annual shipments covering 89 industry categories. Figures are seasonally adjusted. Manufacturers dont want to hold too much inventory because it costs money to store it and it can become obsolete or spoil. Moreover, inventory earns no return on investment. But manufacturers dont want too little inventory either, or they could lose sales. Like Goldilocks, they want an inventory level thats just right. When sales fall, inventories must rise if production is kept at the same pace. Eventually, when inventories are too high, destocking occurs via production cuts. This leads to job losses, fewer raw material purchases, and other negative economy-wide effects. When sales rise, either inventories must fall, production must increase, or both. Eventually, inventories become too low and restocking occurs via production increases. This means more employment, more raw material purchases, and other positive economy-wide effects.
What are the latest numbers? Manufacturing sales fell 0.2% in August 2011 to $450.2 billion from $451.2 billion in July 2011. Manufacturing inventories rose 0.4% in August to $601.2 billion, its 15th straight monthly increase and the first time ever they exceeded $600 billion. The last time prior to this year that manufacturing sales were around $450 billion in September 2008 manufacturing inventories were $581 billion, or $20 billion lower than they are now. Looking at the chart below left makes you wonder if manufacturing inventories might be too high. Getting them down could mean slower manufacturing output, something an already shaky economy doesnt need right now.
Inventory-Sales Ratio for Manufacturing: January 2006 - August 2011
1.5
recession
Manufact. Sales & Inventories: Jan. 2006 - Aug. 2011

($ Billions)
$625 $600 $575 $550 $525 $500 $475 $450 $425 $400 $375 $350 $325 2006
recession
1.4
1.3
Manufacturing inventories
1.2
Manufacturing sales
1.1
1.0 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011
Data are seasonally-adjusted. Source: Census Bureau
Data are seasonally-adjusted but not adjusted for inflation. Source: Census Bureau
Page 24 of 36
The inventory-sales ratio for manufacturing rose 0.6% in August (see bottom right chart on the previous page) to a point slightly higher than where its been for the past couple of years and significantly higher than where it was prior to the onset of the recession.
Manufact. Inventory-Sales Ratio vs. U.S. Rail Traffic* One Month Later: Jan. 2006 - August 2011**
(Index Jan. 2006 = 100)
140
recession
Gap Between Manufacturing Inventories and Manufacturing Sales: Jan. 2006 - Aug. 2011
($ Billions)
$200 $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 2006 2007 2008 2009 2010 2011
Data are seasonally-adjusted. Source: U.S. Census Bureau
130 120 110 100 90 80 70 60 2006 2007 2008 2009 2010 2011
*Carloads + intermodal units. **January inventory-sales ratio vs. February rail traffic, and so on. Data are seasonally adjusted. Sources: Census Bureau, AAR
Mfr. inventory-sales ratio
correlation = -93%
Rail traffic*
Where to go for more information: The Census Bureaus report on manufacturing sales and inventories in August is here. Figures for September 2011 will be released on November 3.
INDUSTRIAL PRODUCTION
Who releases it and when? The Federal Reserve, around the middle of each month. Data from the previous few months are subject to revision.
What is it and why is it important? Industrial production figures are based on the monthly raw volume of goods produced by U.S. industrial firms such as factories, mines, and electric utilities. Data are obtained from a variety of government and industry sources. Manufacturing accounts for about 75% of industrial production, but utility and mine output are key components as well. The industrial sector typically exhibits the most volatility in output during a business cycle. Large changes in industrial output can mean that a business cycle has reached an inflection point. U.S. Industrial Production: Jan. 2006 - Aug. 2011
(Index January 2006 = 100)
110
recession
What are the latest numbers? U.S. industrial production rose 0.2% in August 2011 over July 2011, down from a 0.9% increase the month before (see chart top left of the next page). Including August, industrial production has risen four straight months after falling in two of the first four months of the year. Manufacturing output was up 0.4% in August 2011 over July 2011, a smaller gain than the 0.6% increase in July 2011 over June 2011. Manufac-
105 100
Manufacturing
95
Overall
90 85 80 75 2006 2007 2008 2009 2010 2011

Data are seasonally adjusted. Source: Federal Reserve
Total industrial production was up 0.2% in August 2011 over July 2011; manufacturing output was up 0.4% in August.
Page 25 of 36
turing output has risen in 7 of the 8 months of 2011 and in 23 of the 26 months since the economy bottomed out in June 2009 (see chart above right). Two of the three monthly declines in manufacturing since June 2009 were tiny (in October 2009 and June 2010); the only substantial decline was April 2011s 0.5% decrease, which was due mainly to the earthquake and tsunami in Japan.
Overall U.S. Industrial Production: % Change From Previous Month January 2006 - August 2011
2%
recession
Manufacturing Component of Industrial Production: % Change From Previous Month January 2006 - August 2011
2%
recession
1% 0% -1%
1% 0% -1%
-2%
Aug. 2010 to Aug. 2011: +3.4%
-3%
hurricanes
-2%
Aug. 2010 to Aug. 2011: +4.2%
-4% -5% 2006 2007 2008 2009 2010 2011

-3% -4% 2006 2007 2008 2009 2010 2011

U.S. Industrial Production: Select Sectors January 2006 - August 2011

(January 2006 = 100)
130 120 110 100 90 80 70 60 50 40 2006 2007 2008 2009 2010 2011
U.S. Industrial Production: Select Sectors January 2006 - August 2011

(January 2006 = 100)
175
RR rolling stock
Iron & steel
150
Chemicals
125
Durable consumer goods
100
Wood Paper
75 50 25 2006 2007 2008 2009 2010 2011

Motor vehicles & parts Cement & concrete prod.
U.S. industrial production and its manufacturing component both peaked in December 2007, when the recent recession officially began. The table at right compares industrial production for several key industrial sectors in August 2011 with their peak month in 2007 (which for most sectors was also their peak month of all time). The table shows that total U.S. industrial output in August 2011 was 93.4% of its December 2007 prerecession peak; total manufacturing output in August 2011 was 91.0% of its pre-recession peak. Clearly, for most sectors there is still a long way to go to get back to where they were, but most also are well above where they bottomed out during the recession.
U.S. Industrial Production: Aug. 2011 vs. 2007 Pre-Recession Peak

Peak Month in 2007 Total Manufacturing Cement & concrete Chemicals Coal mining Iron & steel Motor veh. & equip. Paper RR rolling stock Utilities Wood
Source: Federal Reserve
Aug. 2011 as % of Peak Month 93.4% 91.0% 61.7% 86.9% 90.2% 81.1% 79.7% 85.2% 85.8% 96.9% 68.1%
December December January September June December April December January February June
Page 26 of 36
U.S. Industrial Production: January 2011 - August 2011

110 105 100 95 90 85 80 75 70 65 60 55 50 Total IP Total mfg. Iron & steel
(January 2006 = 100)
Wood products
Motor vehicles
Paper
Chemicals Consumer RR rolling durables stock
Overall U.S. Industrial Production vs. Overall U.S. Rail Traffic*

(January 2006 = 100)
110
recession
U.S. Rail Traffic vs. Industrial Production: January 2006 - August 2011
620,000 600,000 580,000 560,000 540,000 520,000 500,000 480,000 460,000 440,000 420,000 400,000 86 88
105
Rail traffic*
100 95 90 85 80 75 70 2006 2007 2008 2009 2010 2011

correlation = 94%
trend line
Blue bars = industrial production Red line = rail traffic*
90 92 94 96 98 100 102 Industrial Production (Jan. 2006=100)
104
106
*Carloads + intermodal units
Data are seasonally adjusted. Source: Federal Reserve, AAR
*Weekly average carloads plus intermodal units. Each dot represents one month. Data are seasonally adjusted. Source: AAR, Federal Reserve
The chart above left, which we include most months, shows the close positive correlation between rail traffic and industrial production. The scatter diagram above right shows the close correlation in a different way. As of this writing, we dont know industrial production for September 2011, but we do know that seasonally adjusted rail traffic in September (carloads plus intermodal) was around 519,800 units per week. Based on past relationships between the two, if industrial production rose in September, it probably wasnt by very much.
Where to go for more information: The Federal Reserve release on industrial production in August 2011 is here. September 2011 data will be released on October 17.
CAPACITY UTILIZATION
Who releases it and when? The Federal Reserve, around the middle of each month.
What is it and why is it important? Capacity utilization attempts to capture the concept of sustainable maximum output i.e., the highest output a plant can maintain assuming a realistic work schedule, normal downtime, and sufficient availability of inputs to operate the capital in place. The data cover manufacturing, mining, and electric and gas utilities.
Page 27 of 36
In theory, a capacity utilization rate of, say, 70% means there is room to increase production up to 100% without having to build new plants or add equipment. In practice, capacity utilization rates (at least on an economy-wide basis) never come close to 100%. Utilization levels above 82%85% are generally considered "tight" and portend price increases or supply shortages in the near future. The farther below this level, the more slack there is in the economy or particular sector. Firms in every industry walk a tightrope when it comes to capacity. If they take too long to bring back idled capacity or build new capacity, they risk shortages and lost sales. Or, they could face higher costs in other areas (e.g., higher overtime costs). On the other hand, adding capacity that ends up not being used adds costs with no offsetting returns.
U.S. Capacity Utilization: Jan. 2006 - Aug. 2011
85%
Manufacturing
recession
What are the latest numbers? Overall U.S. capacity utilization rose slightly to 77.4% in August 2011 from 77.3% in July. Capacity utilization is now at its highest level since August 2008, but theres been some clear wobbliness in the past four months (see the chart below left). Capacity utilization for manufacturing rose to 75.5% in August 2011 from 75.3% in July 2011 and its highest level since June 2008. It was 72.8% in August 2010.
80%
75%
Overall
70%
Overall capacity utilization was up 0.1 percentage points in August 2011 to 77.4%.
65%
60% 2006 2007 2008 2009

Federal Reserve
2010
2011
The chart below right shows the Data are seasonally adjusted. Source: correlation between capacity utilization and rail traffic. Like the correlation between industrial production and rail traffic, it is strongly positive.
Percentage Point Change in U.S. Capacity Utilization From Previous Month: Jan. 2006 - Aug. 2011
1.5% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% -2.0% -2.5%
hurricanes
recession
Overall Capacity Utilization vs. Total U.S. Rail Traffic January 2006 - August 2011
85% 80% 75% 70% 65%
correlation = 97% Capacity utilization (left scale)
recession
600,000 575,000
Rail traffic* (right scale)
550,000 525,000 500,000 475,000 450,000 425,000 400,000
-3.0% -3.5% 2006 2007 2008 2009 2010 2011

60% 2006 2007 2008 2009 2010 2011

*Carloads + intermodal units, weekly average per month. Data are for U.S. and are seasonally adjusted. Source: Federal Reserve, AAR
Where to go for more information: The Federal Reserve release on capacity utilization in August 2011 is here. September 2011 data will be released on October 17.
Page 28 of 36
NUMBER OF EMPLOYED PERSONS AND UNEMPLOYMENT RATE

Who releases it and when? U.S. Bureau of Labor Statistics (BLS) near the beginning of each month.
What is it and why is it important? The figures provide a snapshot of the strength of the U.S. labor market. They are based on two separate surveys: 1) an establishment survey of more than 400,000 businesses, and 2) a household survey of 60,000 households. Among other things, the net number of jobs gained or lost in a given month and the employment by industry figures come from the survey of businesses. The unemployment rate, the size of the labor force, and the labor force participation rate, among other data, come from the household survey. The two different surveys sometimes produce puzzling results. For example, in the same month there can be a sharp drop in the unemployment rate (household survey) without many new jobs created (establishment survey). In the United States, a gain of 150,000 or more jobs from one month to the next is generally considered solid job growth. (Average monthly U.S. job growth from September 2003 through December 2007 was 157,000 jobs.) Job growth of 100,000-125,000 is needed just to keep up with the typical growth in the labor force from one month to the next. Employment is often considered a lagging indicator because employers often decide to wait until theyre sure an economic recovery is here to stay before making new permanent hires. In the meantime, they might rely on more hours for existing workers or on temporary workers. Weak job numbers cause even the still-employed to become less confident of the future, and, therefore, less prone to spend money (see Consumer Confidence and Retail Sales below).
What are the latest numbers? It sure could have been worse. Thats a reasonable reaction to the September 2011 rail employment report. For the month, 103,000 net new jobs were created as 137,000 new private sector jobs were offset by a loss of 35,000 local government jobs. The job gains were generally about double what most analysts were expecting and provide evidence that the economy might not as close to the brink as some have feared. More good news: July and August job gains were revised upward. The revised figures show that 57,000 jobs were gained in August, rather than the zero originally reported last month; job gains in July were a revised up to 127,000 from 85,000 reported last month. In the first nine months of 2011, 1.1 million net new jobs were created. Thats not to say that anyone should break out the champagne: 103,000 is still nowhere near where job gains need to be to clearly demonstrate sustainable economic strength or make much of a dent in the unemployment rate. And, in fact, the unemployment rate in September stayed at 9.1% for the third straight month.
Change in U.S. Non-Farm Employment: January 2006 - September 2011*
500 400 300 200 100 0 -100 -200 -300 -400 -500 -600 -700 -800 -900
Red line is roughly what bars would look like if census-related employment were excluded.
U.S. Unemployment Rate: Jan. 2006 - Sept. 2011*

12% 11% 10% 9% 8%
Men The official U.S. unemployment rate has been 9.1% for three straight months.
000s
2007: +1.1 million 2008: -3.6 million 2009: -5.1 million 2010: +0.9 million 2011: +1.1 million*
*Jan.-Sept.
Sept. 2011: +103,000
7% 6% 5% 4% 3%
W omen
Overall
2006
2007
2008
2009
2010
2011
2006
2007
2008
2009
2010
2011
*Change from previous month. Figures are seasonally adjusted. Source: BLS
*Civilian labor force, seasonally adjusted. Source: Bureau of Labor Statistics
Page 29 of 36
The chart at right shows how job gains U.S. Job Gains & Losses: Jan. 2011 - Sept. 2011 (or losses) have been distributed Health care (+258,000) among some of the major industry Manufacturing (+176,000) categories in 2011 through Leisure & hospitality (+149,000) September. As has been true for Retail sales (+145,000) years, gains are being led by health Temps (+80,000) care, with 258,000 jobs added so far Construction (+53,000) this year. With people getting older and sicker (thats you, Baby Transp. & warehousing (-2,000) Boomers), this could go on for a while. Federal govt.* (-5,000) Manufacturing added 176,000 so far Financial activities (-14,000) this year, but thats only a small part of the 2.2 million manufacturing jobs lost State & local government (-234,000) from 2008 to 2010. Likewise, construction added 53,000 jobs so far *Excludes postal service. Data are seasonally adjusted. Source: BLS in 2011, but thats nothing compared to the 2.0 million construction jobs lost from 2008 to 2010. State and local governments have shed 234,000 jobs.
Net Change in Number of Jobs
Where to go for more information: The BLS press release on the September 2011 employment situation is here. Data for October 2011 will be released on November 4, 2011.
CLASS I FREIGHT RAILROAD EMPLOYMENT

Who releases it and when? The Surface Transportation Board (STB), around the middle of the month.
What is it and why is it important? The data show the average number of Class I freight railroad employees at mid-month. As in other industries, employment in the rail industry is largely a function of the level of business.
What are the latest numbers? Class I freight rail employment rose by 1,121 in August 2011 from July 2011 to 160,107; employment in August 2011 was 7,399 higher than in August 2010, a 4.5% increase. The number of train and engine employees grew by nearly 800 in August 2011; most of the rest of the added employees were tracks and equipment maintenance employees.
RR Train & Engine Employees* vs. Rail Traffic**
(Index January 2006 = 100)
75,000
recession
Class I Railroad Employment: Jan. 2004 - August 2011

170,000 165,000 160,000 155,000 150,000
630,000 580,000
Rail traffic** (right scale)
70,000 65,000 60,000
530,000 480,000 430,000

correlation = 92%
145,000 140,000 135,000 2004 2005 2006 2007 2008 2009 2010 2011
Beginning in January 2010, the bars in this chart are around 1,000 employees higher than in previous months due to the inclusion of employees from two large railroads acquired by a Class I railroad. Data are non-seasonally adjusted. Source: STB
Train & engine employees* (left scale)
55,000 50,000 2006 2007 2008 2009 2010 2011
380,000
*Mainly engineers and conductors. **Seasonally adjusted carloads + trailers + containers Source: STB (for employment), AAR (for traffic)
Page 30 of 36
Where to go for more information: The STB web site for railroad employment data is here.
CONSUMER CONFIDENCE
Who releases it and when? The Conference Board on the last Tuesday of the month.
What is it and why is it important? The index is based on surveys received from about 3,000 U.S. households. It is designed to gauge the financial health, spending power, and confidence of the average U.S. consumer. Respondents are asked about current conditions and their expectations for the next six months. The index is designed to predict future consumer spending, on the theory that the more confident consumers are about their job prospects, income, etc., the more likely they are to make purchases, especially big-ticket items. As David Wyss (the chief economist at Standard & Poors) has said, A confident consumer buys a new car. A cautious consumer repairs the old one. Consumers psyches are most heavily influenced by economic factors, such as gas prices, the unemployment rate, and how much money they have to spend, but non-economic factors such as terrorist attacks, a military victory, or even a good performance at an international sporting event can come into play too. Because there is always going to be some noise and monthto-month volatility in consumer confidence, trends are more important than a single data point.
What are the latest numbers? After plunging from 59.5 in July 2011 to 45.2 in August 2011, consumer confidence improved only fractionally to 45.4 in September. It remains as low as its been since early 2009. What the Conference Board said about the September index: The pessimism that shrouded consumers last month has spilled over into September. Consumer expectations posted a marginal gain. However, consumers expressed greater concern about their expected earnings, a sign that does not bode well for spending. In addition, consumers assessment of current conditions declined for the fifth consecutive month. We show the chart below right every few months. It shows the close relationship between consumer confidence and the unemployment rate. Its awfully hard to be confident about the future if you dont have a job or worried that you might not have one next week. The unemployment rate isnt the only thing that matters to consumer confidence, but its hard to see how there could be a meaningful increase in it without much better employment news. Septembers job gains are a start (see page 29), but its not enough.
Index of Consumer Confidence: January 2006 - September 2011
(Index 1985 = 100)
120 110 100 90 80 70 60 50 40 30 20 10 0 2006 2007 2008 2009 2010 2011
Source: Conference Board
Consumer Confidence vs. Unemployment Rate January 2006 - September 2011

120 100
Unemployment rate (right scale)
4% 6% 8% 10%
Consumer confidence (left scale)
80 60 40 20
correlation = 80%
12% 14% 16%
0
2006 2007 2008 2009 2010 2011
Source: Conference Board, BLS
Page 31 of 36
Where to go for more information: The Conference Boards press release on Septembers consumer confidence index is here. Octobers consumer confidence index will be released on October 25.
RETAIL SALES
Who releases it and when? The U.S. Census Bureau, around the ninth business day of each month.
What is it and why is it important? The Census Bureau surveys 5,000 retailers of all types to track the dollar value of physical merchandise sold. The data are adjusted for holiday differences and seasonal variations but are not adjusted for inflation. (The personal consumption expenditures U.S. GDP vs. Retail Sales* component of GDP is adjusted for 10% inflation, but is less timely than retail 8% sales.) 6% Personal consumption accounts for approximately 70% of U.S. GDP. Thus, the health of the economy depends largely on how much stuff people buy. Its circular, though, because the health of the economy determines how much stuff people can buy. The chart at right shows the close correlation between retail sales and GDP.
4% 2% 0% -2% -4% -6% -8% -10% -12% '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11
*Data are year-over-year percentage changes based on seasonally adjusted figures. Source: BEA, Census Bureau
bars = GDP
line = retail sales
correlation = 93%
What are the latest numbers?
Retail sales in August 2011 were basically flat, rising just $164 million (0.04%) over July 2011 to $389.5 billion (see chart below left). Given the sharp drop in consumer confidence we saw in August (see previous page), this result isnt much of a surprise. And with consumer confidence stagnant in September too, it wouldnt be surprising to see similar results for retail sales in September. July retail sales were revised down to a 0.3% gain from the originally reported 0.5% gain.
% Change in Total Retail Sales from Previous Month: January 2006 - August 2011
4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011
Total Retail Sales: January 2006 - August 2011

($ billions)
$400 $390 $380 $370 $360 $350 $340 $330 $320 $310 $300
Data are seasonally adjusted but are not adjusted for inflation. Source: Census Bureau
recession
Data are seasonally adjusted but are not adjusted for inflation. Source: Census Bureau
Page 32 of 36
So-called core retail sales sales excluding autos and gasoline were up just 0.1% in August, their smallest monthly increase of the year.
Where to go for more information: The Census Bureaus press release covering August 2011 retail sales is here. September 2011 retail sales will be released on October 14.
NEW LIGHT VEHICLE SALES

Who releases it and when? The U.S. Bureau of Economic Analysis early in the month.
What is it and why is it important? Data cover U.S. sales of cars and light trucks, including pickups and SUVs. Over the past 50 years, spending on motor vehicles has accounted, on average, for about 3.7% of U.S. GDP. Monthly auto sales are often referred to in terms of seasonally-adjusted annualized rates (SAAR). In 2010, 6% of U.S. Class I railroad revenue came from hauling autos and auto parts.
What are the latest numbers? New light vehicle sales rose to 13.0 million in September 2011 on an annualized and seasonally-adjusted basis, up from 12.1 million in August 2011. Thats the highest sales level since April 2011 and another indication that the economy isnt dead yet.
% Change in U.S. Light Vehicle Sales From Previous Month: January 2006 - September 2011
30% 20%
"Cash For Clunkers" recession
New U.S. Light Vehicle Sales: Jan. 2006 - Sept. 2011*

(Seasonally-Adjusted Annualized Rate in Millions)
20 18 16 14 12 10 8 6 4 2 0 2006 2007 2008 2009 2010 2011
Annualized U.S. light vehicle sales were 13.0 million in September 2011, up from 12.1 million in August 2011.
10% 0% -10% -20% -30% -40% 2006 2007 2008 2009 2010 2011
Data are seasonally adjusted. Source: BEA
*Data include passenger cars, SUVs, minivans, and pickups. Source: BEA
U.S. Light Vehicle Sales vs. Consumer Confidence

18 16 14 12 10 8 6 4 2 0 2006 2007 2008 2009 2010 2011
Light vehicle sales* (left scale)
correlation = 92%
135
Consumer confidence (right scale)
"Cash For Clunkers"
U.S. Light Vehicle Sales vs. U.S. + Canadian Rail Carloads of Motor Vehicles & Equipment
18 36,000 32,000
"Cash For Clunkers"
120 105 90 75 60 45 30 15 0
16 14 12 10 8 6 4 2 0 2006 2007 2008 2009 2010 2011

Blue bars = vehicle sales* (left scale) Red line = rail carloads (right scale)
correlation = 94%
28,000 24,000 20,000 16,000 12,000 8,000 4,000 0
*Passenger cars, SUVs, minivans, and pickups in millions at seasonally adjusted annual rates. Sources: BEA, Conference Board
*Passenger cars, SUVs, minivans, and pickups in millions at seasonally adjusted annual rates. Rail carloads are seasonally adjusted weekly averages per month. Source: AAR, BEA
Page 33 of 36
The increase in auto sales over the past couple of months is somewhat surprising given the sharp decline in consumer confidence over that period (see page 31). Given the strong positive correlation between the two in recent years (see the chart on the bottom left of the previous page), one can probably expect auto sales to slacken off or consumer confidence to rise in the months ahead.
Where to go for more information: BEA data on auto sales are here.
HOUSING STARTS
Who releases it and when? U.S. Census Bureau, around the middle of each month.
What is it and why is it important? A housing start is beginning the foundation of a residential home. Historically, housing has directly accounted for around 5% of the overall economy and has large spillover effects on other sectors (such as retail sales and manufacturing), since people buying new homes tend to spend on other goods such as furniture, lawn and garden supplies, and appliances. In the past, housing starts have usually been considered a leading indicator because construction growth usually picks up at the beginning of a business cycle. However, factors in todays housing market including a huge oversupply of existing houses due to slow sales and widespread foreclosures means new construction is a big drag on the economy today.
What are the latest numbers? Housing starts in August 2011 fell 5.0% from July 2011 to an annualized 571,000 (see chart below left). Rail carloads of lumber and wood products rose slightly in September, giving some hope that housing starts in September will see a bit of an upswing too (see chart below right).
U.S. Housing Starts vs. U.S. + Canadian Rail Carloads of Lumber, Wood & Forest Products
2,400
SingleFamily July '11-Aug. '11 Aug. '10-Aug. '11 MultiFamily Total -5.0% -5.8%
U.S. Housing Starts: January 2006 - August 2011

(Seasonally-Adjusted Annualized Rate, Thousands)
2,500 2,250 2,000 1,750 1,500 1,250 1,000 750 500 250 0 2006 2007 2008 2009 2010 2011
Source: Census Bureau
18,000 15,000 12,000 Rail carloads (right scale) 9,000 Housing starts (left scale, in 000s)
correlation = 98%
2,000 1,600 1,200
-1.4% -12.4% -2.3% -10.3%
Total Single-family units Multi-family units
800 400 0
6,000 3,000 0
2006
2007
2008
2009
2010
2011
Data are seasonally adjusted. Housing starts are monthly figures annualized. Rail carloads are average weekly originations for the month and include Canadian traffic. Source: AAR, Census Bureau
More bad news for housing came on September 21 with the release of the latest quarterly survey by MacroMarkets of more than 100 housing industry experts. The consensus was that national home prices will grow, on average, just 1.1% through 2015, compared to an average annual increase in housing prices of 10.4% from Q1 2000 through Q2 2006 (the bubble years) and an average annual decline of 7.1% from Q3 2006 through Q2 2011 (the bust years).
Where to go for more information: The Census Bureaus press release on housing starts in August 2011 is here. September data will be released on October 19.
Page 34 of 36
CONSUMER PRICE INDEX (CPI)

Who releases it and when? The U.S. Bureau of Labor Statistics (BLS) releases the data mid-month.
What is it and why is it important? The CPI is the benchmark inflation guide for the U.S. economy. It measures the changes in the cost of a representative basket of consumer goods and services. The BLS collects prices from more than 20,000 retail and service establishments throughout the country. The CPI for All Urban Consumers (CPI-U) is the inflation index most often reported by the media, although BLS publishes hundreds of CPI indexes each month. The core CPI defined as CPI less food and energy is also commonly used. Food and energy prices are typically more volatile than other prices due in part to their susceptibility to external shocks. Its hard not to have at least a little inflation when an economy is growing, but inflation can harm economies in many ways. Just one example: inflation confuses price signals producers dont know if higher prices are simply part of an inflation-related adjustment or if they signal higher demand that warrants expanded production. It is believed that the Federal Reserve regards inflation of 1.5% to 2% to be about right for the U.S. economy. The CPI-U or a related index is the basis for cost-of-living adjustments for Social Security, federal retirement payments, many private pensions, and food stamps.
What are the latest numbers? The overall consumer price index rose 0.4% in August 2011, down from a 0.5% gain in July 2011 (see the chart below left). Over the 12 months ending in August 2011, the increase was 3.8%, the highest annual rate since September 2008 (see the chart below right). CPI excluding food and energy core CPI was up 0.3% in August 2011, slightly higher than the corresponding figure for July 2011 (see the line in the chart below left). For the 12 months ending in August 2011, core CPI was up 2.0%, its biggest increase since November 2008.
Year-Over Year Change in the Consumer Price Index: January 2006 - August 2011*
6% 5% 4% 0.5% 0.0% -0.5% -1.0% -1.5% -2.0% 2006 2007 2008 2009 2010 2011
*Urban consumers, U.S. city avg. seasonally adjusted. Source: Bureau of Labor Statistics
Month-to-Month Change in the Consumer Price Index: January 2006 - August 2011*
1.5% 1.0%
Blue bars = overall Red line = excluding food and energy
3% 2% 1%
Blue bars = overall Red line = excluding food and energy
0% -1% -2% -3% 2006 2007 2008 2009 2010 2011

*Urban consumers, U.S. city average. Source: Bureau of Labor Statistics
Where to go for more information: The BLS press release on the August 2011 CPI is here; the CPI for September 2011 will be released October 19.
Page 35 of 36
RAIL FREIGHT CARS IN STORAGE

Who releases it and when? The Association of American Railroads each month in Rail Time Indicators.
What is it and why is it important? A freight car is in storage if it has had a loaded revenue move since 2005, but not in the past 60 days. Rail cars are stored when they are not needed due to lack of demand; they come out of storage when demand improves. Figures are for the entire North American rail freight car fleet and include rail cars owned by railroads, leasing companies, shippers, and others. The total freight car fleet changes from month to month as new cars are added and old cars are scrapped. Our best estimate is that, in the past when the economy was at its healthiest, 2%-3% of freight cars were in storage. To the extent that railroads are able to improve freight car utilization, they will need fewer of them for the same level of traffic. For various reasons, a freight car that goes into storage does not necessarily ever come out of storage.
What are the latest numbers? As of October 1, 2011, 260,317 freight cars were in storage, 11,087 fewer cars than on September 1 and equal to 17.1% of the North American fleet (see charts below).
North American Freight Cars in Storage
550,000
31.9% of the fleet
North American Freight Cars Out of Storage

15,000 10,000 5,000 0 -5,000 -10,000
500,000 450,000 400,000 350,000

17.1% of the fleet
-15,000 -20,000 -25,000
300,000 250,000 200,000

n/a
-30,000 -35,000 2010 2011 May-Dec '09 2010 2011

Figure for Jan. 2011 = difference in cars in storage on Feb. 1, 2011 compared to cars in storage on Jan. 1, 2011; other months calculated similarly. Source: AAR
Mar.-Dec. '2009
Data are as of the first of the month; % are cars stored as % of total fleet. Source: AAR
In July 2009, 1.603 million cars were in the fleet. From July 2009 through September 2011, 47,767 new cars were installed, while 117,127 cars were scrapped or otherwise removed, yielding a net reduction of 69,360 cars in the North American fleet. 527,060 cars were in storage on July 1, 2009 (including cars that havent moved since before 2005). By October 1, 2011, that was down to 273,130, for a reduction of 253,930. Subtracting the 117,127 cars scrapped or otherwise removed yields 136,803 cars returned to service.
Where to go for more information: Contact Frank Hardesty (fhardesty@aar.org, 202-639-2321). Media inquiries should go to Holly Arthur (harthur@aar.org, 202-639-2344).
Page 36 of 36

Rail Time Indicators Sep 2011

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Rail Time Indicators Sep 2011

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Rail Time Indicators

A Review of Key Economic Trends Shaping Demand for Rail Transportation

Policy & Economics Department Association of American Railroads Washington, D.C.

SUMMARY OF MOST RECENT DATA

Capacity Utilization (p. 27) Employment (p. 29)

Rail Freight Cars in Storage (p. 36)

Rail Time Indicators October 7, 2011

U.S. AND CANADIAN FREIGHT RAILROAD TRAFFIC

Average Weekly U.S. Rail Carloads: All Commodities

15% 10% 5% 0% -5%

-20% -25% 2006 2007 2008 2009 2010 2011

Rail Time Indicators October 7, 2011

Rail Time Indicators October 7, 2011

Average Weekly U.S. Rail Intermodal Traffic

2006 (peak year)

2008 2011 2010 2009

YTD U.S. Rail Traffic Through September as a % of 2006 Levels

80% 75% 70%

'06 '07 '08 '09 '10 '11

'06 '07 '08 '09 '10 '11

'06 '07 '08 '09 '10 '11

Rail Time Indicators October 7, 2011

Avg. Weekly Canadian Rail Carloads: All Commodities

60,000 50,000 40,000

Average Weekly Canadian Rail Intermodal Traffic

34,000 Jan Feb Mar Apr May Jun

Rail Time Indicators October 7, 2011

U.S. RAIL TRAFFIC: SEPTEMBER 2011*

Average Weekly U.S. Rail Traffic: Total Carloads + Intermodal Units

2006 (peak year)

2011 2008 2010 2009

Rail Time Indicators October 7, 2011

U.S. RAIL TRAFFIC: THIRD QUARTER 2011*

Rail Time Indicators October 7, 2011

CANADIAN RAIL TRAFFIC: SEPTEMBER 2011*

Average Weekly Canadian Rail Traffic: Total Carloads + Intermodal Units

Rail Time Indicators October 7, 2011

CANADIAN RAIL TRAFFIC: THIRD QUARTER 2011*

Rail Time Indicators October 7, 2011

COMBINED U.S. AND CANADIAN RAIL TRAFFIC: SEPTEMBER 2011*

2006 (peak year)

Rail Time Indicators October 7, 2011

COMBINED U.S. AND CANADIAN RAIL TRAFFIC: THIRD QUARTER 2011*

Rail Time Indicators October 7, 2011

-10% -15% Jul Aug Sep Oct Nov Dec -20%

Avg. Weekly Canadian Rail Carloads of Coal

9,000 8,000 7,000

-10% -20% -30% -40%

U.S. Electricity Generation From Coal

160 150 140

130 120 Jan Feb Mar Apr May Jun

Aug Sep Oct Nov Dec

Rail Time Indicators October 7, 2011

2011 2007 (peak year)

Avg. Weekly Canadian Rail Carloads of Chemicals

Jul Aug Sep Oct Nov Dec

U.S. Industrial Production of Chemicals vs. U.S. Rail Carloads of Chemicals

33,000 31,000 29,000 27,000 25,000 23,000 21,000 19,000

Rail Time Indicators October 7, 2011

Average Weekly U.S. Rail Carloads of Grain

-10% -20% -30%

Average Weekly Canadian Rail Carloads of Grain

Rail Grain Tonnage by Movement Type