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Will Surge in US Freight Rail Traffic Continue?

PART:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Part 8
Will Surge in US Freight Rail Traffic Continue? PART 8 OF 17

BNSF Railway Saw Growth in Carloads Volume

BNSF Railway’s carloads

BNSF Railway (BRK-B) operates in the Western United States and competes primarily with Union Pacific (UNP). Its total railcars for the week ended March 11, 2017, rose 8.2% YoY (year-over-year) to over 94,000 units as compared to 87,000 plus units in the corresponding week of 2016.

Carloads other than coal and coke grew 3.5% YoY to ~59,000 units in the week ended March 11, 2017. The percentage rise in BNSF Railway’s overall carloads was near twice the percentage increase reported by US railroads overall.

BNSF Railway Saw Growth in Carloads Volume

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Why coal matters to BNSF

BNSF Railway’s coal and coke railcars rose 17% in the week ended March 11, 2017, on a YoY basis, which was almost equal to the rise reported by rival UNP. Coal transportation contributed nearly 22% of freight revenue in 2015 for Berkshire Hathaway’s BNSF, the largest US Class I railroad.

About 90% of this coal originates from the Powder River Basin in Wyoming and Montana. Major coal producers operating in that area include Alpha Natural Resources (ANR) and Peabody Energy (BTU). Environmental concerns and competition from natural gas (UGAZ) are hampering incremental coal shipment prospects for coal producers (ARLP) in 2016.

Commodity groups

The main leading commodities for the week ended March 11, 2017, were as follows:

  • grain
  • motor vehicles
  • metal
  • sand and gravel
  • stone, clay, and glass

Commodities that witnessed backward movement included the following:

  • metallic ores
  • petroleum
  • waste and scrap
  • forest products

In the next part, we’ll look at BNSF Railway’s intermodal traffic.

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