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Week 15: US Freight Rail Traffic Rises: Are Good Times Ahead?

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Part 9
Week 15: US Freight Rail Traffic Rises: Are Good Times Ahead? PART 9 OF 14

BNSF Railway: How Intermodal Volumes Compared in Week 15

BNSF Railway’s intermodal volumes

In the 15th week of 2017, BNSF Railway’s (BRK-B) overall intermodal traffic rose 5.1% on a YoY (year-over-year) basis to more than 100,000 containers and trailers. It was more than the nearly 96,000 containers in the corresponding week of 2016. The company’s container volumes rose 5.6% to slightly less than 91,000 containers in the 15th week of 2017.

BNSF’s trailer volumes rose 1.3% YoY to slightly more than 10,000 trailers. The rise in intermodal traffic was similar to the overall rise reported by US railroad companies in the same category.

BNSF Railway: How Intermodal Volumes Compared in Week 15

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Are intermodal volumes vital to BNSF?

BNSF Railway includes domestic and international intermodal operations in its Consumer Products Freight business, which also includes automotive freight. This segment accounted for ~30.0% of the company’s total revenues in 2016.

It’s worth noting that BNSF Railway accounted for ~50.0% of the total Western US freight rail traffic in 2016. The company handles 1.0 million more intermodal units every year than any other Class I railroad company. Its intermodal volumes represent nearly 50.0% of its business portfolio.

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 could consider the WisdomTree Earnings 500 ETF (EPS). All US-born Class I railroad companies are included in the EPS portfolio.

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

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