U.S. rail traffic grew 3.1 percent as auto manufacturing expands

Total U.S. rail traffic rose 3.1 percent the week ending Sept. 14 compared to the same period last year, according to a recent report by the Association of American Railroads.

Overall, North American freight traffic broke even year-over-year with carload traffic going up across the board for all three countries. This shows more companies are relying on freight sourcing to ship their products as consumer confidence bounces back after the recession and domestic manufacturing continues its recovery. U.S. freight carload traffic gained 1.5 percent while intermodal volume increased even more at 4.9 percent year-over-year. Beating the U.S., Canadian freight carload traffic increased by 4.9 percent for the week ending Sept. 14 and up 5.1 percent for intermodal volume. Advancing 6.3 percent, Mexican freight volume was also surpassed by a 7.5 percent jump in intermodal volume.

The AAR said rail activity has increased for the majority of the carload commodity groups monitored by the association with seven out of 10 posting gains as shipments of motor vehicles and parts moved up 14.4 percent. More consumers are demanding big ticket items like automobiles resulting in a surge in auto sales.

Petroleum and petroleum products are staying on par with this figure as U.S. oil and natural gas production booms.

Energy companies have turned to railways to transport output from the Midwest to refineries, International Business Times reported.

Recently, Jack Gerard, CEO of the American Petroleum Institute, released a statement encouraging President Barack Obama to approve the Keystone XL pipeline, which is slated to transport Canadian oil to be refined at American facilities. 

"Refining more Canadian oil at American refineries should be a no brainer," Gerard said. "It will help displace oil from unstable parts of the world and enhance our national security. Americans overwhelmingly support building the Keystone XL pipeline."

Faced the delay in the pipeline network, John Felmy, chief economist at the APT, told International Business Times that he thinks railroading fits in with the organization's shipping goals.