Canadian National Railway Led the Pack in Week 17
Canadian National’s carloads
Since January 1, 2017, Canadian National Railway’s (CNI) volumes have risen the most YoY (year-over-year) among Class I railroads. For the past few weeks, Canadian National’s carloads have risen.
In the week ended April 29, 2017, the company’s overall volumes rose 14.6% on a YoY basis. In the same week, its railcar volumes rose to almost 63,500 units, compared with 55,400 units in the comparable week of 2016. Canadian National’s carload volumes rose more than overall railcar volumes in the United States and Canada.
The company’s railcar volumes, excluding coal and coke, rose 16.3% in the 17th week of 2017. Coke and coal products were flat compared with 2016.
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Should we overlook Canadian National’s coal exposure?
Canadian National Railway’s coal carloads, including coke, were flat in the 17th week of 2017. The company moved ~5,700 coal and petroleum coke railcars that week. The percentage rise in Canadian National’s coal volumes was much lower than the 23.0% rise reported by rival Canadian Pacific (CP).
It’s worth noting that ~4.0% of Canadian National’s total 2016 revenue came from coal transportation. Coal’s contribution to the company’s total carloads was a mere 6.0% in 2016. As a result, Canadian National might be better positioned to avert coal’s headwinds than peers Norfolk Southern (NSC), CSX (CSX), and Union Pacific (UNP).
Transportation sector investors could consider investing in the iShares US Industrials ETF (IYJ). Major US railroad companies make up 6.2% of IYJ’s portfolio holdings.
Leaders and laggards
In the week ended April 29, 2017, the major rising commodity groups were as follows:
- food and kindred products
- lumber and wood
- crushed stone
- metal products
The main falling commodity groups were the following:
- primary forest products
- grain mill products
- stone clay and glass
In the next article, we’ll take a look at Canadian National Railway’s intermodal traffic in the 17th week of 2017.