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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 13
Will Surge in US Freight Rail Traffic Continue? PART 13 OF 17

Inside Canadian National’s Intermodal Volumes in the 10th Week

Canadian National’s intermodal volumes

In the week ended March 11, 2017, Canadian National Railway’s (CNI) overall intermodal volumes rose 6.1%. Trailer movement remained flat.

The company moved almost 42,000 containers in the tenth week of 2017 as compared to 39,000 plus containers in the corresponding week of 2016. The percentage rise in CNI’s intermodal volumes was in line with the overall rise reported by US and Canadian railroads.

Inside Canadian National&#8217;s Intermodal Volumes in the 10th Week

Inside Canadian National&#8217;s Intermodal Volumes in the 10th Week

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Why is intermodal important for CNI?

Canadian National’s intermodal segment contributed more than one quarter of the company’s total revenue in 2016. Of the segment’s total carloads that year, intermodal’s share was ~42%. Canadian National also operates one of the largest trucking services in Canada, which supplements its intermodal business.

Canadian National’s competitive advantage is its sole access to the Port of Prince Rupert, British Columbia. CNI also connects Vancouver, British Columbia, with Prince Rupert in a long arc, which provides opportunities for the company to move containers from Asia to the North American heartland.

CNI’s domestic segment is driven by consumer markets and by US and Canadian economic growth. Its international segment is influenced by North American economic and trade conditions. In the intermodal business, the company faces competition from truckload companies such as J.B. Hunt Transport Services (JBHT), Swift Transportation (SWFT), and Landstar System (LSTR).

ETF option

If you’re looking for exposure to the transportation sector, you can invest in the Guggenheim S&P 500 Equal Weight ETF (RSP). All US-originated Class I railroads are included in the portfolio holdings of RSP.

In the next part of this series, we’ll take a look at Canadian Pacific Railway’s (CP) weekly rail traffic data.

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