X
<

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 6
Week 13: US Freight Rail Volumes on a Growth Trajectory PART 6 OF 15

Did Union Pacific See Growth in Freight Volumes in the 13th Week of 2017?

Union Pacific’s carloads

In the Western United States, Union Pacific (UNP) competes with BNSF Railway, which is owned by Berkshire Hathaway (BRK-B). In the week ended April 1, 2017, UNP’s overall railcar volumes rose 10.8% YoY (year-over-year) to nearly ~92,000 units.

Railcar volumes excluding coal and coke rose 6.3% YoY to almost 73,000 units, compared to ~68,000 units in the same week of 2016. Investors interested in comparing this week’s freight volume data with the previous week’s data can visit Market Realist’s Week 12: North American Freight Rail Traffic on the Fast Track.

Did Union Pacific See Growth in Freight Volumes in the 13th Week of 2017?

Interested in ARLP? Don't miss the next report.

Receive e-mail alerts for new research on ARLP

Success! You are now receiving e-mail alerts for new research. A temporary password for your new Market Realist account has been sent to your e-mail address.

Success! has been added to your Ticker Alerts.

Success! has been added to your Ticker Alerts. Subscriptions can be managed in your user profile.

Why coal carloads matter

In the 13th week of 2017, Union Pacific recorded an impressive 32.2% rise in combined coal (ARLP) and coke carloads. In 4Q16, Union Pacific witnessed a 6.0% fall in coal revenues.

However, 2017 has brought some hope for the company and the entire sector, given the upward momentum in coal prices. As a result, many research houses have started factoring in coal growth to the railroads’ price targets.

Coal’s (CNX) share of the company’s total revenues totaled 14.4% in 4Q16, compared to 15.3% in the same period in 2016. Union Pacific receives much of its coal revenues from coal shipments originating in the southern PRB (Powder River Basin).

According to the EIA (U.S. Energy Information Administration), PRB production has fallen over the past few years, mainly due to the recession and competition from natural gas. In 2016, PRB coal output fell significantly for the first time since 1998. Competition from natural gas (UGAZ), primarily resulting from reduced natural gas prices, has been one of the main factors affecting coal output recently.

Rising and falling commodity groups

The rising commodities in the week ended April 1, 2017, included:

  • grain
  • iron and steel scrap
  • metals and products
  • primary forest products
  • stone clay and glass products

The major falling commodity groups were as follows:

  • metallic ore
  • petroleum products
  • grain mill products

In the next article, we’ll assess the position of UNP’s intermodal traffic in the week ended April 1, 2017.

X

Please select a profession that best describes you: