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Week 23: US Freight Rail Traffic Moving on the Right Track

PART:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Part 7
Week 23: US Freight Rail Traffic Moving on the Right Track PART 7 OF 16

Union Pacific: Its Intermodal Volumes Fell in Week 23

Union Pacific’s intermodal volumes

In the week ended June 10, 2017, Union Pacific (UNP) hauled ~76,000 containers and trailers, 4.1% more than in the same period in 2016 on a year-over-year basis. In contrast with the other railroads, UNP’s container traffic grew faster than its trailers in the reported week of 2017. While its container traffic rose 4.2%, its trailers rose 1.6%.

The company’s trailer traffic rose 1.6% in week 23 compared with the corresponding period in 2016. The rise in UNP’s intermodal volumes in percentage terms was lower than the rise recorded by US railroad companies.

Union Pacific: Its Intermodal Volumes Fell in Week 23

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Union Pacific and intermodal volumes

Union Pacific’s (UNP) intermodal business growth was highlighted after its recent drop in coal revenues. In 1Q17, Union Pacific’s intermodal volumes accounted for 37.5% of its total volumes, while its intermodal revenues contributed nearly 19%.

Railroad companies’ intermodal segments usually compete with long-haul trucking companies such as J.B. Hunt Transport Services (JBHT), Swift Transportation (SWFT), and Knight Transportation (KNX).

Union Pacific also has a presence in Mexico. The company’s intermodal business in Mexico suffered volume losses due to stiff competition from the trucking industry in 1Q17.

Investing in ETFs

Transportation sector investors may want to consider the iShares US Industrials ETF (IYJ). Major US railroad companies (UNP) and airlines (DAL) comprise 6.2% of IYJ’s portfolio holdings.

In the next part of this series, we’ll look at BNSF Railway’s rail traffic.

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