CNI’s weekly carloads
Canadian National Railway (CNI) recorded a ~15% fall in its weekly total railcar units to 56,000 for the week ended March 12, 2016, compared to 66,000 units in 2015. Railcar units excluding coal and coke have fallen by nearly 11%.
CNI received 18% revenues from both US and Canadian domestic traffic in 2015. For the week ended March 12, 2016, CNI’s total railcar units fell in-line with the falls in total US and Canadian railcar traffic.
CNI has a low thrust on coal
Canadian National’s coal and coke carloads fell by a staggering 37% in the week ended March 12, 2016. The company transported 6,096 railcars of coal and petroleum coke in the same week, compared to 9,684 railcars in the same week in 2015. Only 5% of CNI’s total revenues in 2015 came from coal transportation. In addition, coal’s contribution to the company’s total carloads was a mere 8% in 2015.
CNI is well positioned to avert coal headwinds compared to its rival Canadian Pacific (CP) and its US peers Norfolk Southern (NSC), CSX (CSX), Union Pacific (UNP), Genesee & Wyoming (GWR), and Kanas City Southern (KSU).
Investors opting for pure play in the transportation sector can invest in the First Trust Industrials/Producer Durables AlphaDEX ETF (FXR). This ETF has 5.4% exposure to railroads and 10.2% exposure to airlines.
The frontrunners and the laggards
Rising commodities in the week ended March 12, 2016, were forest products, automotive, and food and kindred products. Commodities in the red zone were petroleum and chemicals, metals, and minerals and grain.
In the subsequent part, we’ll analyze Canadian National Railway’s intermodal traffic.