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Friday, June 5, 2020
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Trade War and Trains

The ongoing trade war with China and slowing industrial production continue to weigh on railroad traffic.

The number of carloads of industrial products, raw materials, grain, coal and chemicals that U.S. railroads haul is down 4.3% overall so far this year, according to the Association of American Railroads.

The slower traffic hurt profits at all the major freight railroads during the third

quarter.

The trade dispute between the United States and China has prompted both sides to

impose tariffs on billions of dollars of imports that have hurt farmers and factories.

The dispute has already led to notable declines in exports, including American crops, and it has affected how many shipping containers of imported goods are being handled by railroads.

Railroad traffic numbers hint at the health of the overall economy.Grain shipments are down 6.2% through the first 43 weeks of the year while shipments of containers of imported and other goods declined 4.4%.

Weak coal demand also hurt railroad results as more utilities move away from using the fuel.

The number of coal shipments is down 7.6% this year after declining steadily over the past

several years.