Canadian railway carloadings decline 11.8 percent in July

Wednesday, 30 September 2020 19:49:19 (GMT+3)   |   San Diego
       

According to Statistics Canada, despite the rebound in trade with the United States, railway carloadings remained below pre-pandemic levels in July, falling short of a full recovery. The volume of freight transported by Canadian railways posted year-over-year declines for the fifth consecutive month since the start of the COVID-19 pandemic. Canadian railways carried 29.7 million tons of freight in July, a decrease of 11.8 percent compared with July 2019. Low demand for raw minerals and hydrocarbon freight was responsible for this decline.

The lingering effects of the pandemic contributed to the dampening demand for energy products, as loadings of fuel oils and crude petroleum saw the largest decline in July, dropping 67.1 percent (-1.4 million tons) compared with the same month in 2019, despite stronger crude oil exports in July. Similarly, coal loadings dipped 23.0 percent (-764,000 tons) year over year in July. Fuel oils, crude petroleum and coal products accounted for over half (53.7 percent) of the total year-over-year drop in tonnage.

As border closures and travel restrictions remained in effect in many jurisdictions, gasoline and aviation turbine fuel loadings saw a decline of 55.4 percent (-177,000 tons) year over year in July. This decrease reflected weaker demand for these fuels during the summer driving and air travel season.

According to Canadian international merchandise trade data for July 2020, there was a second consecutive month of growth in exports and imports, led mostly by motor vehicles and parts. Although automobile and mini-van carloadings fell 29.7 percent (-42,000 tons) in July, motor vehicle parts and accessories saw a year-over-year increase (+12.8 percent or +2,000 tons). Other transportation equipment also rose (+39.3 percent or +6,000 tons), with assembly plants ramping up production as the economy began to reopen.

Following the economic lockdown to slow the spread of COVID-19, loadings of agriculture and food products—deemed essential commodities—were up, and this continued into July, with larger year-over-year increases in carloadings of wheat (+34.6 percent or +626,000 tons), canola (+82.3 percent or +547,000 tons) and other cereal grains (+69.8 percent or +146,000 tons). Lower farm stocks for canola and wheat as of July 31, as shown in the Stocks of grain and oilseeds table, attest to the increase in grain movement. Furthermore, potash loadings also increased year over year in July (+9.9 percent or +178,000 tons).

According to data in the weekly performance indicators of grain transportation by rail table, the average number of cars loaded and billed in August was 59,512, up from 48,596 in August 2019. Similarly, the Weekly rail system performance by type of rail car table reveals that the monthly average of the number of intermodal cars on line for August 2020 was similar to the average for August 2019, pointing to a bigger recovery in the volume of rail traffic. However, expectations of higher freight volumes in August 2020 may be dampened by the labor dispute at the Port of Montréal, which has connections to major rail networks on the East Coast. Moreover, low demand may persist for exports of certain key commodities moved by rail.


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