01:36 PM EDT, 04/01/2025 (MT Newswires) -- North American Class 1 railroad carloads finished the quarter up +3% y/y driven by higher Intermodal volumes. RBC notes however that reported AAR carload data does not reflect the impact from the leap year in 2024, which favourably impacted compares by 100bps, and actual carloads will likely come in -1% below reported AAR numbers.

Canadian rail revenue ton mile (RTMs) were also higher in in the first-quarter with RTMs at CN up +1% and at CP up +3%. Volumes at both rails were impacted by cold weather in February and benefited from higher Coal volumes, RBC said.

"Overall, we flag indication that intermodal is exiting Q1 strong as a potential tailwind for the rails during the remainder of the year. We highlight that Hapag-Lloyd earlier this month reported Q4 results and provided its 2025 outlook, with management flagging that they see volumes "increasing clearly" in 2025. More specifically, management said they expect market growth of around +4% this year and that based on what they have seen in Q1 "they have no reason to doubt that". However, we are cognizant there may have been some pull-forward ahead of potential tariffs and continue to see evolving trade policy as a risk to carloads in 2025. We also see continued thermal Coal headwinds as weighing on the US rails this year," RBC noted.

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