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Week Ended March 18: US Freight Rail Traffic Gains More Momentum

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Part 8
Week Ended March 18: US Freight Rail Traffic Gains More Momentum PART 8 OF 15

Did Coal Volumes Push Up BNSF Railway’s Carloads in Week 11?

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 18, 2017, rose 15% YoY (year-over-year) to ~95,000 units, compared to over 82,000 units in the corresponding week of 2016.

Carloads other than coal and coke rose 5.4% YoY to ~58,000 units in the week ended March 18, 2017. The rise in BNSF Railway’s overall carloads was nearly three times the amount of the rise reported by US railroad companies overall.

Did Coal Volumes Push Up BNSF Railway&#8217;s Carloads in Week 11?

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Why coal matters to BNSF

BNSF Railway’s coal and coke railcars rose 34.5% YoY in the week ended March 18, 2017, which was almost double the rise reported by rival UNP. In 2015, coal transportation contributed nearly 22% of freight revenue for Berkshire Hathaway’s BNSF, the largest US Class I railroad company.

About 90% of this coal originates from the Powder River Basin in Wyoming and Montana. Major coal producers operating in the 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 2017.

Commodity groups

The commodities that rose in the week ended March 18, 2017, were as follows:

  • food
  • sand and gravel
  • stone, clay, and glass
  • grain mill products
  • iron and steel scrap

The commodities that fell were as follows:

  • grain
  • metallic ore
  • forest products
  • non-metallic minerals

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

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