How Did BNSF’s Intermodal Volumes Compare with the US Railroads?
BNSF’s Intermodal segment’s volumes
The total traffic for BNSF Railway’s (BRK-B) Intermodal segment for the week ended November 5, 2016, was up 3.2%. From ~97,000 containers and trailers in the comparable week of 2015, it rose to ~100,000 containers and trailers in the reported week of 2016.
In the same week, container traffic rose 4.1% on a year-over-year basis to ~89,000 containers from 85,000-plus units in the corresponding week in 2015. Compared with the US railroads’ 1.7% rise in intermodal volumes, BNSF’s increase was noteworthy. For a detailed review of BNSF’s 3Q16 earnings, please read Market Realist’s A Segmental Breakdown of Burlington Northern Santa Fe’s 3Q16.
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Unlike containers, the trailer traffic was down 3.6% in the week ended November 5, 2016, at ~11,000 trailers from 11,500 trailers in the corresponding week last year.
BNSF’s Intermodal segment
BNSF Railway’s Domestic and International Intermodal operations are part of its Consumer Products Freight business. This business also includes automotive freight revenue earned by the company. This business segment accounted for ~31% of BNSF’s total revenues in 2015.
The company’s share of Western US rail traffic in 2015 was ~50%. In addition, the company handles 1 million more intermodal units every year than any other Class I railroad. Intermodal represents nearly 50% of BNSF’s business portfolio by volume.
BNSF Railway also faces tough competition from truckers like J.B. Hunt Transport (JBHT) and Swift Transportation (SWFT) in the intermodal space. Intermodal volumes, apart from seasonality, are also impacted by highway-to-rail conversions and the carrier’s exclusive access to certain high-traffic ports.
Investors with an affinity for the transportation space can invest in the Wisdom Tree Earnings 500 Fund ETF (EPS). All the US-based Class I railroads are included in the portfolio holdings of EPS.
For comparison with the previous week’s freight volume data, please read Market Realist’s Gauging the Economy via Freight Traffic: Week Ended October 29. You can garner more information on the major US railroad stocks on Market Realist’s Railroads page.
In the next part, we’ll look at the carloads of the US’s smallest Class I railroad—Kansas City Southern (KSU).