For the past few weeks, Canadian National Railway (CNI) has been recording positive changes in carloads compared to 2015. However, for the reported week ended December 10, 2016, volume growth came to a standstill.
CNI recorded no rise in total railcars. Carloads, excluding coal and coke, rose 3.1%. When overall Canadian railroad volumes rose, CNI’s railcar volumes didn’t rise.
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Canadian National’s coal, including coke carloads, fell 19.7% in the week ended December 10, 2016. The company moved 6,500 coal and petroleum coke railcars in the same week, compared to 8,100 in the comparable week last year. The percentage fall in CNI’s coal volumes was far higher than the negative change reported by Canadian Pacific (CP) in the same category.
It’s worth noting that ~4.0% of CNI’s total revenues in 3Q16 came from coal transportation. Coal’s contribution to the company’s total carloads was a mere 6.7% that quarter.
So we can probably conclude that CNI is better positioned to avert coal’s headwinds than peers such as Norfolk Southern (NSC), CSX Corporation (CSX), Union Pacific (UNP), and Kanas City Southern (KSU).
Transportation sector–specific investors can invest in the iShares US Industrials (IYJ). All major US railroads make up 5.6% of the portfolio holdings of IYJ.
In the week ended December 10, 2016, the major advancing commodity groups included the following:
Major commodity groups that reported a fall included the following:
To compare our reporting week’s traffic data with the previous week, please refer to Freight Rail Traffic for the Week Ended December 3.
In the next part, we’ll take a look at intermodal traffic for Canadian National Railway.
For more information on US major railroad stocks, visit Market Realist’s railroads page.