Canadian & US Freight Rail Traffic Rises, Mexico Lags
US freight rail traffic
Every week, the AAR (Association of American Railroads) publishes the North American freight rail data for the previous week. The latest is for the week ended February 18, 2017, or the seventh week of the year.
During the seventh week of 2017, US rail traffic (BRK-B) rose 6.8% YoY (year-over-year) to over 531,000 railcars, compared with 497,000 railcars in the week ended February 20, 2016. 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.
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US carloads rose 7.6% YoY to ~264,000 railcars for the week, compared with ~245,000 railcars in the week ended February 20, 2016. Intermodal volumes grew to ~267,500 units, up from 252,000 units during the same period last year.
AAR’s outlook for 2017
AAR president and CEO Edward R. Hamberger stated that “we remain focused on providing the best possible rail network for our customers and all Americans.”
Hamberger added that “as a result, the freight rail industry will advocate for a simpler and fairer tax code to enhance U.S economic development, promote growth and reduce debt. Freight railroads will also push for a sustainable funding source that provides for aggressive investment in public infrastructure.”
On February 1, 2017, AAR disclosed that the privately owned US freight rail industry is expected to shell out more than $22 billion on capital investments. This figure is up from 2016’s overall capex, which was impacted by declining coal volumes.
Canadian and Mexican rail traffic
Canadian rail traffic (CNI) rose 15.4% YoY to just over 79,000 plus railcars, while intermodal traffic rose 8.6%, settling at about 62,000 units. Mexican railroads’ (KSU) carloads fell 4.1% during the week ended February 18, 2017. However, Mexican intermodal traffic rose 9.5% YoY.
Investors interested in ETFs could opt for the Vanguard Dividend Appreciation ETF (VIG). All US Class I railroads (NSC) are included in VIG’s portfolio. Continue to the next part for a look at Norfolk Southern’s carloads for the week ended February 18, 2017.