Intermodal Shines in US Freight Rail Volumes, Railcars Down
US freight rail volumes
Every week, the AAR (Association of American Railroads) publishes the North American freight rail data for the previous week. The latest data is for the week ended December 17, 2016. During that week, US freight rail traffic (UNP) fell 0.3% to 524,000 units from over 525,000 units in the week ended December 19, 2015. If you’re interested in comparing this week’s traffic data with the previous week, you can refer to Freight Rail Traffic for the Week Ended December 10.
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In the reported week, US railcar volume fell 2.8% to ~255,000, from 262,000 in the corresponding week last year. However, intermodal volumes rose 2.2% to over 269,000 units from more than 263,000 units during the same period last year.
AAR’s comments on freight rail volumes
On December 7, 2016, John T. Gray, AAR’s senior vice president of policy and economics, said, “There are glimmers of hope in rail traffic data in November, with carloads and intermodal totals both up over last year — something that hasn’t happened for carloads in 22 months and for intermodal in nine months. Hopefully, these results are indicators of continuing future growth for the manufacturing economy, for trade, and for rail traffic. It appears that economic fundamentals are trending toward more positive results than have been seen in the recent past.”
Canadian and Mexican rail traffic
In the week ended December 17, 2016, Canadian rail traffic (CNI) declined 1.3% and the intermodal volume growth was almost flat. Carloads of Mexican railroads (KSU) fell 13.3%. However, intermodal volumes rose a remarkable 12.9% in the 50th week of 2016.
If you’re interested in dividend ETFs, you could invest in the Vanguard Dividend Appreciation ETF (VIG). All US Class I railroads (NSC) are part of VIG’s portfolio holdings. For information and a comparative analysis of the performance of railroads in 3Q16, please refer to How Major US Railroads Performed in 3Q16.
For more information on major US railroad stocks, please visit Market Realist’s Railroads page. In this series, we’ll take a look at the total volumes for all Class I railroads for the week ended December 17, 2016.