Weekly rail data from the Association of American Railroads (https://www.aar.org/data-center/rail-traffic-data/) reveals how supply chain activity — at least as measured by rail traffic — continues to vary greatly by end-market. In the year-to-date (YTD) period reported as of August 25, 2021, U.S. total carloads and intermodal traffic generally kept pace with 2019 comparables and even challenged a multi-year historical peak around the end of April. In the months which would follow, volumes steadily trended lower, falling below even depressed 2020 levels according to the latest release. One might conclude from this that prolonged shortages of critical upstream supply chain goods are simply having a worsening impact on total global production.

However, as with many things, this high-level view provides an oversimplified conclusion with limited — if any — actionable insights. Reviewing the data at a more granular level, however, does provide a far better understanding of the supply chain landscape and how some supply chains and end-markets are quietly doing far better than general headlines suggest.

Forest Products: Rail shipments of forest products continue to do very well.  Weekly shipments during 2021 have frequently been above their comparable levels in 2019 and far and away higher than in 2020. These figures come despite vastly higher prices in 2021 as compared to 2019. Chicago lumber futures in 2019 valued 1,000 board feet around $330; however, even the lowest prices in 2021 have been at least 40% above the 2019 average, to say nothing of the thankfully temporal 400% price rise in the second quarter of the year. Interestingly the surge in forest product shipments has been observed only in the U.S. In contrast, Canadian and Mexican railroads volumes are closer to their depressed 2020 readings.

Metallic Ores & Minerals: Similar to the experience of forest products, metallic ores and minerals have witnessed strong shipment volumes throughout much of 2021 despite recently elevated prices. Across the continent, railroads are reporting robust shipment volumes. In particular, Mexican railroad shipments in recent months are at unit volumes nearly 60% and 30% above their 2020 and 2019 levels respectively. In the U.S., carload volumes are at or slightly above 2019 volumes and roughly 1/3 above 2020 levels. In Canada, shipments are also at or slightly above 2019 levels and well above last year’s.

Chemicals: Chemical shipment volumes by U.S. and Canadian railroads have compared favorably against previous years’ volumes. Only in Mexico have unit shipments struggled against historic levels.

Beyond these markets, rail data casts a difficult picture for many other markets. 2021 has seen a slow but steady weekly decline in volumes for shipments of petroleum and petroleum products, in addition to motor vehicles and parts. Furthermore, 2021’s coal shipments, as well as nonmetallic minerals, have come off of 2020 lows but still have much ground to make up to match pre-pandemic volumes.  

In short, transportation data shows that supply chain conditions are as unique as the end markets they serve. Furthermore, despite sometimes wild price fluctuations, strong demand and high volumes suggest an insensitivity to price that producers rarely see and are even more unlikely to test.