Rail Traffic Declined in July
OTTAWA - Sep 27/21 - SNS -- Freight volumes carried by Canadian railways declined 4% in July, according to Statistics Canada.
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.
Non-intermodal rail carloadings drove the overall decline in July, falling 9.0% year over year to 21.8 million MT 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% (-702,000 MT) in July, the largest drop recorded in more than 20 years. Similarly, carloadings of wheat dipped 28.6% (-694,000 MT) in July, the third month of decline in a row.
July's decline in grain traffic reflected several factors, including the ongoing depletion of inventories and the temporary backlog of rail cars because of the mainline outages west of Kamloops caused by the wildfires in British Columbia. Canada's exports of wheat and canola also suffered in July, declining year over year by 33.2% and 5.8%, respectively, according to the International trade monthly interactive dashboard.
In addition, loadings of iron ores and concentrates loadings fell 9.1% (-477,000 MT) from July 2020, the third consecutive year-over-year decline. While smaller than the drops recorded in June (-28.0%) and May (-45.2%), 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% (-378,000 MT) from July 2020.
Other significant decreases were also reported for potash, with loadings down 13.7% (-271,000 MT) in July from the same period a year ago.
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% (+478,000 MT) from the same month a year ago, following strong growth in June (+91.6%) and May (+43.9%).
Rising global fuel consumption amid the easing of COVID-19-related restrictions led to strong demand for energy products. Loadings of gaseous hydrocarbons, including liquefied petroleum gas, also grew 23.7% (+123,000 MT) from July 2020, following similar year-over-year increases in June (+28.2%) and May (+29.8%).
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% (+110,000 MT) 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% for primary metal manufacturing sales in July.
Intermodal shipments, mainly containers, originating in Canada totalled just over 2.8 million MT in July, up 8.4% from July 2020, following larger year-over-year increases in June (+28.6%) and May (+35.2%).
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% in July, while those in eastern Canada continued their upward pace, rising by 20.5% 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% to 3.7 million MT in July, following an even stronger gain in June (+36.1%).
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