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Tracking Rail Traffic for the Week Ended February 18

PART:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Part 12
Tracking Rail Traffic for the Week Ended February 18 PART 12 OF 15

Canadian National’s Carloads: Upward Momentum Continues

Canadian National’s carloads

For the past few weeks, Canadian National Railway’s (CNI) carloads have been following a rising trend. In the week ended February 18, 2017, overall volumes rose 9.8% on a YoY (year-over-year) basis. In the same week, CNI’s railcar volumes rose to ~63,500 units from ~58,000 units in the comparable week of 2016.

CNI’s railcars, excluding coal and coke volumes, rose an impressive 11.2% in the seventh week of 2017. CNI’s volumes rose in tandem with those of Canadian railroads.

Canadian National’s Carloads: Upward Momentum Continues

Canadian National’s Carloads: Upward Momentum Continues

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Is coal important for Canadian National?

Canadian National’s coal carloads, including coke, dropped 2.1% in the seventh week of 2017. The company moved 6,000 coal and petroleum coke railcars that week, compared with ~6,200 in the same week of 2016. The percentage fall in CNI’s coal volumes was much lower than the 10% fall reported by Canadian Pacific (CP).

It’s worth noting that ~4% of CNI’s total 2016 revenue came from coal transportation. Coal’s contribution to the company’s total carloads was a mere 6% that year. We can surmise that CNI might be better positioned to avert coal’s headwinds than peers Norfolk Southern (NSC), CSX (CSX), Union Pacific (UNP), and Kansas City Southern (KSU).

Transportation sector investors can always consider investing in the iShares US Industrials ETF (IYJ). Major US railroads make up 6.1% of the portfolio holdings of IYJ. If you want to compare this week’s freight volume data with the previous week’s, check out Market Realist’s A Light at the End of Tunnel: Rail Traffic, Week Ended February 11.

Leaders and laggards

In the week ended February 18, 2017, the major advancing commodity groups were as follows:

  • petroleum and chemicals
  • metals and minerals
  • automotive
  • farm products
  • grain

The major commodity groups that reported declines included the following:

  • food and kindred products
  • grain mill products
  • forest products

In the next part, we’ll take a look at Canadian National Railway’s intermodal traffic.

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