Canadian rail freight volume down 4 percent in July

Monday, 27 September 2021 19:48:29 (GMT+3)   |   San Diego

According to Statistics Canada, the volume of cargo carried by Canadian railways was 28.3 million tons in July, down 4.0 percent from July 2020 levels. This marked the first notable year-over-year decline in rail volumes in eight months, when the industry emerged from the lingering effects of the COVID-19 pandemic last fall.

The overall freight volume was at the lowest level for the month of July since 2016. Fewer shipments of grains and other commodities were the main contributors, as there were wildfires burning across British Columbia that damaged rail lines and caused a backlog of some shipments.

Despite the decline in July, the volume of goods moved by rail during the first seven months of 2021 totaled 212.8 million tons, up 2.3 percent compared with the same period in 2020. This cumulative total is the third highest value on record for the January-to-July period.

In July, there were temporary disruptions to some rail movements in western Canada amid wildfires that destroyed mainline railway track near Lytton in southern British Columbia. As a result, the decline in total traffic carried during July reflected a steep 6.1 percent drop in western Canada compared with the same month in 2020, while eastern Canada edged down 0.6 percent.

Non-intermodal rail carloadings drove the overall decline in July, falling 9.0 percent year over year to 21.8 million tons in July, led by declines in some agricultural and food products. In particular, loadings of canola declined year over year for the fifth consecutive month, dropping by 58.5 percent (-702,000 tons) in July, the largest drop recorded in more than 20 years.

In addition, loadings of iron ores and concentrates loadings fell 9.1 percent (-477,000 tons) from July 2020, the third consecutive year-over-year decline. While smaller than the drops recorded in June (-28.0 percent) and May (-45.2 percent), it still reflected lingering production disruptions at a Quebec-Labrador mine site.

Loadings of coal posted a year-over-year decrease after two consecutive months of increases, decreasing 14.8 percent (-378,000 tons) from July 2020.

Partly offsetting declines were large tonnage increases in loadings of some hydrocarbon-based commodities. After recording substantial year-over-year declines for over a year, loadings of fuel oils and crude petroleum rose for the third month in a row, up by 71.3 percent (+478,000 tons) from the same month a year ago, following strong growth in June (+91.6 percent) and May (+43.9 percent).

In addition, loadings of iron and steel, primary or semi-finished, posted a year-over-year gain for a sixth consecutive month, rising 37.9 percent (+110,000 tons) from July 2020. This strong demand for metals may reflect infrastructure investments designed to stimulate economic recovery. Indeed, the Monthly Survey of Manufacturing reported a hefty year-over-year increase of 57.7 percent for primary metal manufacturing sales in July.

Loadings of metallic waste and scrap also rose, up 23.5 percent (+61,000 tons) compared with the same month in 2020, following a 1.3 percent decline in June.

Finally, loadings of other chemical products and preparations increased by 34.3 percent (+55,000 tons) year over year in July, following similar increases in June (+46.6 percent) and May (+30.2 percent).

Intermodal shipments—mainly containers—originating in Canada totalled just over 2.8 million tons in July, up 8.4 percent from July 2020, following larger year-over-year increases in June (+28.6 percent) and May (+35.2 percent).

July's increase was tempered by the wildfires that destroyed mainline railway track near Lytton in southern British Columbia, delaying shipments to and from the Port of Vancouver. The tonnage of intermodal shipments in western Canada edged down 0.2 percent in July, while those in eastern Canada continued their upward pace, rising by 20.5 percent from the same month in 2020.

Also helping to offset the tonnage decline in non-intermodal or commodity loadings was freight traffic connecting from the United States, which posted a year-over-year increase for a fifth consecutive month. These connections rose 26.1 percent to 3.7 million tons in July, following an even stronger gain in June (+36.1 percent).

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