For the past few weeks, Canadian National Railway’s (CNI) carloads have been following a rising trend. In the week ended January 28, 2017, overall volumes rose 6.3% on a YoY (year-over-year) basis. In the same week, CNI’s railcar volumes rose to ~57,000 units from nearly 52,000 units in the comparable week of 2016.
CNI’s railcars, excluding coal and coke volumes, rose 6.5% in the fourth week of 2017. CNI’s volumes in the reported week rose in tandem with Canadian railroads’. Investors interested in comparing this week’s freight volume data with the previous week’s can read Tracking Freight Rail Traffic for the Week Ended January 21.
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Canadian National’s coal carloads, including coke, dropped 16.8% in the fourth week of 2017. The company moved 5,500 coal and petroleum coke railcars that week, compared with ~6,600 in the same week of 2016. The percentage rise in CNI’s coal volumes was almost in tune with the percentage fall reported by Canadian Pacific (CP) in the same category.
It’s worth noting that ~4% of CNI’s total revenue in 2016 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 could consider investing in the iShares US Industrials ETF (IYJ). Major US railroads make up 6.4% of the portfolio holdings of IYJ.
In the week ended January 28, 2017, the major advancing commodity groups were as follows:
The major commodity groups that reported declines were the following:
In the next part, we’ll take a look at Canadian National Railway’s intermodal traffic.