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US Freight Rail Traffic on Track, but Mexico Stays Derailed

PART:
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Part 8
US Freight Rail Traffic on Track, but Mexico Stays Derailed PART 8 OF 14

Here’s What Led BNSF Railway’s Growth in Carloads

BNSF Railway’s freight volumes

BNSF Railway (BRK-B) is Berkshire Hathaway’s mammoth freight rail carrier and operates in the Western United States, closely competing with Union Pacific (UNP). BNSF Railway’s total carloads excluding intermodal grew 4.7% in the week ended July 8, 2017. It moved ~89,500 railcars that week, compared with nearly 85,500 railcars during the corresponding week of 2016.

Railcards other than coal and coke rose 1.2% YoY (year-over-year) to ~51,000 units in the 27th week of this year, compared with ~51,000 railcars in the same week of 2016. BNSF Railway registered strong volume gains percentage-wise compared with overall US railroads’ (IYJ) 1.1% rise in carloads.

Here&#8217;s What Led BNSF Railway&#8217;s Growth in Carloads

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Coal volumes

Coal (ARLP) and coke railcars, which accounted for 43% of BNSF Railway’s total carloads, saw a ~10% volume gain last week. The company hauled ~38,000 coal (ANR) and coke carloads, compared with ~35,000 railcars last year. BNSF Railway’s coal and coke volumes in the same week were up, while rival UNP saw a slump in this category.

Coal dynamics in the US

According to the EIA (US Energy Information Administration), in 2017, “growth in coal-fired electricity generation and exports are expected to lead to an increase of 57 MMst (8%) in total US coal production.”

On the coal consumption front, the EIA stated: “Electric power sector coal consumption is forecast to increase by 9 MMst (1%) in 2017, mostly because of rising natural gas prices. In 2018, demand for coal in the power sector is expected to increase by 2 MMst.”

Changes in commodity group volumes

The commodities that posted higher volumes last week were:

  • chemicals
  • motor vehicles
  • metallic ores
  • sand and gravel
  • iron and scrap

The commodity groups that saw volume declines were:

  • grain
  • petroleum
  • stone, clay, and glass
  • pulp and paper

Continue to the next part for an update on BNSF Railway’s intermodal volumes.

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