Trains are the dominant mode of transportation for moving freight—from grain, coal and ethanol to automobiles, food, chemicals and consumer goods.
You can say that rail networks are the arteries and veins of the economy, carrying goods throughout the country, much as the body’s blood vessels carry oxygen throughout the body.
The relationship between freight rail and the economy can be described as one of interdependence.
Rail supports the economy, and vice versa. They thrive together. They fail together.
You might then be wondering if rail companies are currently on life support given these perilous economic times amid coronavirus.
Or maybe the situation is not as grim. If freight rail volume looks strong, doesn’t this say something equally positive about the economy?
These are questions we aim to answer using satellite imagery by monitoring rail activity at the country’s largest hub, Chicago.
More than a quarter of freight railcars and one-half of intermodal trains pass through Chicago.
We selected four Chicago rail yards: Clearing, Kirk, Blue Island and Barr.
Below is a closer look at Clearing yard. It’s over 5 miles in length and supports over 250 miles of track. Clearing is one of the largest facilities in the US for separating railway cars onto separate tracks.
A closer look reveals shipping containers lined up in rows. Shipping containers can be transferred from ship to truck to rail, known as intermodal transport.
Our team analyzed satellite imagery to determine the presence or absence of rail cars at each of the four rail yards.
The satellite imagery came from synthetic aperture radar (SAR), a type of all-weather, day or night technology.
Using SAR, you can determine man-made objects in an area, i.e. railcars.
The presence of more “bright” or “white” areas means there is greater SAR energy, which means more train cars present.
The SAR images below captured the Clearing yard (outlined in red) on March 15 and April 8 this year.
What’s “happening” might not be obvious to the naked eye.
Ursa’s radar imagery experts analyzed SAR imagery collected over a 16 month period to determine the presence or absence of rail cars at the four Chicago rail yards.
Next, they quantified the SAR energy to develop an index to determine activity levels to visualize trends.
The SAR energy was divided by the average over the full 16 month period. Results above 1 are greater than the average, while results below 1 are less than the average.
Using this index, our team saw minimal changes in SAR activity from January 2020 to present, as shown by the trend line on the graph above. This signals industrial rail demand has been relatively flat in Chicago.
Further monitoring of the four Chicago rail yards and additional locations may present similar or contrary findings.
Activity at the Chicago rail yards represents the net impact of COVID-19 on freight and intermodal transport.
In that sense, it serves as a powerful gauge.
The situation grows more complicated when you analyze rail traffic by category because each industry is different.
So far in 2020, some categories are hurting more than others, while some are even faring better.
In their latest earnings call, Union Pacific executives described the mixed performance of different business groups in terms of carloads in Q1.
Coal, renewable fuel, metals, minerals, automotive, domestic and international intermodal saw less volume.
Grain, grain products, fertilizer, sulfur, food and beverage (beer), chemicals and plastics grew during the first quarter.
“Looking ahead, there remains quite a bit of uncertainty surrounding this global pandemic that we're facing,” said Kenny Rocker, executive vice president at Union Pacific.
“With the free fall in economic indicators over the past few weeks and uncertainty about when we will see the COVID pandemic curve start to flatten out, an accurate assessment of 2020 is hard to pinpoint at this time,” he said.
That sums it up nicely.
Find this story and more COVID-19 insights on our COVID-19 Dashboard.
Ursa is continuously monitoring vital locations around the world using satellite imagery to provide a deeper understanding of the socio-economic impacts of COVID-19.
If you’re interested in learning more, please email us.