Could it be that railroad shipments, considered a leading economic indicator, are sending a positive signal?

Railroad CEOs, speaking Wednesday at the JPMorgan transportation conference, said only that conditions are not getting worse. But Drew Robertson, who has compiled statistics on rail shipments for two dozen years, sees it differently.

Looking at cyclical products like crushed stone, lumber, iron ore, chemicals and coke as leading indicators among the most common railroad shipments, Robertson sees improvement.

"It's not horns and hats time yet for the economy or the railroad industry, but evidently things are coming back a little bit," he says. "It's less worse than it used to be."

For instance, chemical shipments are down from 2008, but have been better the last few weeks than they were earlier in the year. Lumber is slightly better than it was a year ago. In general, cyclical traffic has rebounded since mid-January, more than can be explained by its normal seasonal bounce.

The trends can be seen clearly at railfax.transmatch.com, a Web site maintained by Robertson, who heads New York-based transportation consulting firm Atlantic Systems. In particular, the four-week rolling average trends for baseline and cyclical traffic are up, while intermodal traffic continues to trend down. In interviews in 2007 and again in 2008, Robinson, referring to the data, noted sharp declines in U.S. industrial production.

Wick Moorman, CEO of Norfolk Southern ( NSC), described January and February as "anemic" and said: "We certainly don't see any change in that in the short term, although we do not right now see any continuing deterioration year-over-year."

CFO Rob Knight of Union Pacific ( UNP) said the company has the capacity to move 200,000 carloads weekly, but current demand is for 140,000 to 150,000, where "It feels like we may have reached a floor." In the meantime, Union Pacific has furloughed 3,600 employees and parked 53,000 freight cars.

Robertson says railroads' overall improvement is being held back by intermodal shipments, primarily consumer goods from China, with its declines masking growth in other sectors. "Consumer spending was the last thing to be hit, and it is not coming back yet," he said.

Another piece of the railroad pie is coal and grain shipments, which Robertson terms "baseline" shipments because demand tends to remain relatively constantly. Though baseline traffic dropped following the shock in the credit markets after the collapse of Lehman Brothers, it has recovered this year. "Coal and grain are coming back, as you would expect," he said. "People still make toast in a recession."

Additionally, autos shipments -- counted as "cyclical traffic" in railfax charts -- are recovering very slightly, as inventory levels adjust after several quarters of decline. At the end of February, inventories had fallen 32% at Ford ( F), 20% at Chrysler and 17% at General Motors ( F), compared with inventory levels a year earlier.

As for the railroads themselves, they are busily cutting capacity and costs, raising rates -- which is possible because reduced capacity has led to better service -- and continuing their long wait for the day when a national energy policy recognizes that rail shipping is generally more energy efficient than shipping by truck. It may be said that railroads are the preferred transportation mode of the past as well as the preferred transportation mode of the future -- only the present is troubling.

Looking ahead, "It's real simple," said Matt Rose, CEO of Burlington Northern ( BNI). "One of the ways we lower our dependence on foreign oil is shipping more freight on rail."+

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