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Week 13: US Freight Rail Volumes on a Growth Trajectory

PART:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Part 13
Week 13: US Freight Rail Volumes on a Growth Trajectory PART 13 OF 15

Canadian National Railway’s Intermodal Growth in Week 13 of 2017

Canadian National’s intermodal volumes

In the week ended April 1, 2017, Canadian National Railway (CNI) saw its overall intermodal volumes expand 17%. However, there was no trailer movement in the 13th week of 2017.

Canadian National Railway moved almost 46,000 containers in the 13th week of 2017, compared to more than 39,000 containers in the corresponding week of 2016. The rise in CNI’s intermodal volumes was much higher than the overall rise reported by railroad companies in the US and Canada.

Canadian National Railway&#8217;s Intermodal Growth in Week 13 of 2017

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Why is intermodal traffic important for CNI?

Canadian National Railway’s Intermodal segment contributed more than 25% to the company’s total revenues in 2016. Of the company’s total carloads during the year, Intermodal’s share was ~42%. Canadian National Railway 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 US heartland.

CNI’s Domestic segment is driven by consumer markets and by US and Canadian economic growth. The company’s International Intermodal segment is largely influenced by North American economic and trade conditions.

In the intermodal sector, Canadian National Railway 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 Rydex S&P 500 Equal Weight ETF (RSP). All US-originated Class I railroad companies 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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