In the 52nd week of 2016, BNSF Railway’s (BRK-B) container traffic rose 14.4% on a YoY (year-over-year) basis to ~81,000 containers, up from 70,000 plus units in the corresponding week a year ago. The trailer volumes also rose 6.6% to 9,500 trailers in the reported week of 2016.
The percentage rise reported by BNSF’s intermodal volumes was slightly higher than the rise reported by US railroads in the same category.
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BNSF Railway’s domestic and international intermodal operations are part of its Consumer Products Freight business. The business also includes automotive freight earned by the company. It’s worth noting that this segment accounted for ~31.0% of BNSF’s total revenue in 2015.
The company’s share of Western US rail traffic in 2015 was ~50.0%. The company handles a million more intermodal units every year than any other Class I railroads. Intermodal represents nearly 50.0% of BNSF’s business portfolio by volume.
BNSF Railway faces tough competition from truckers like J.B. Hunt Transport Services (JBHT) and Swift Transportation (SWFT) in the intermodal space. Intermodal volumes are impacted by seasonality, highway-to-rail conversions, and access to certain high-traffic ports.
If you’re interested in the transportation space, you might invest in the Wisdom Tree Earnings 500 ETF (EPS). All US-born Class I railroads are included in the portfolio holdings of EPS.
In the next part, we’ll take a look at the carloads of the smallest US Class I railroad, Kansas City Southern (KSU).