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Week Ended March 4: Was US Rail Traffic on the Right Track?

PART:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Part 9
Week Ended March 4: Was US Rail Traffic on the Right Track? PART 9 OF 15

How BNSF Railway’s Intermodal Volumes Fared Last Week

BNSF Railway’s intermodal volumes

In the ninth week of 2017, BNSF Railway’s (BRK-B) overall intermodal traffic fell slightly by 2.5% on a YoY (year-over-year) basis to 94,000 plus containers and trailers, down from ~97,000 containers in the corresponding week of 2016. The container volume slid 3.3% to slightly less than 84,000 containers in the ninth week of 2017.

However, trailer volumes expanded 4.4% YoY (year-over-year) to ~11,000 trailers. BNSF’s percentage fall in intermodal traffic was in tune with the slump reported by US railroads in the same category.

How BNSF Railway’s Intermodal Volumes Fared Last Week

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Why is intermodal important to BNSF?

BNSF Railway’s domestic and international intermodal operations are part of its Consumer Products Freight business. The business also includes automotive freight. It’s worth noting that this segment accounted for ~31% of BNSF’s total revenue in 2015.

The company’s share of Western US rail traffic in 2015 was ~50%. Notably, BNSF handles a million more intermodal units every year than any other Class I railroad, and intermodal represents nearly 50% of BNSF’s business portfolio by volume.

BNSF’s intermodal competition

BNSF Railway faces tough competition from truckers such as J.B. Hunt Transport Services (JBHT) and Swift Transportation (SWFT) in the intermodal space. Intermodal volumes are impacted by seasonality, highway-to-rail conversions, and access to certain high-traffic ports.

If you’re interested in the transportation space, you may want to invest in the Wisdom Tree Earnings 500 ETF (EPS). All US-born Class I railroads are included in its portfolio. Investors interested in comparing this week’s freight volume data with the previous week’s should check out Market Realist’s US Freight Traffic Takes the High Rail: Week Ended February 25.

In the next part, we’ll take a look at the carloads of the smallest US Class I railroad, Kansas City Southern (KSU).

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