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US and Canada Intermodal Traffic Slips Off the Tracks

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US weekly railcar traffic

Every Wednesday morning, the AAR (Association of American Railroads) releases the weekly rail traffic data for the previous week. The latest report is for the week ended April 9, 2016.

During this week, the total US railcars declined to ~230,000, reflecting a double-digit fall of 20% from 287,000 units in the week ended April 11, 2015. In the reported week, US intermodal traffic slumped by nearly 8% to ~249,000 units, from 270,000 units during the same period in 2015.

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Canadian and Mexican rail traffic

In the latest reported week, Canadian rail traffic recorded a decline in railcars and intermodal traffic. These railroads reported a fall of 13.1% in railcars in the week ended April 9, 2016, compared with the corresponding period in 2015. Canadian freight rail carriers recorded a fall of 8.1% in intermodal traffic in the week ended April 9, 2016, compared with the corresponding period in 2015.

This time, Mexican railroads offered a mixed bag for rail traffic growth. Although their volumes of railcars fell by 8.4%, the intermodal traffic rose by 7.2% in the reported week. The rise in Mexican intermodal volumes against the backdrop of the fall in US and Canadian intermodal traffic is noteworthy.

Only two out of ten carload commodity groups posted volume growth in the week ended April 9, 2016—miscellaneous railcars, motor vehicles, and parts. The weekly backbenchers were coal, down by ~45%, followed by petroleum products and grain.

North American freight traffic 

There are 13 railroads that submit weekly data. These carriers handle about 95% of the total US and Canadian freight traffic. Class I railroads account for the lion’s share in freight rail movement:

  • BNSF Railway (BRK-B)
  • Canadian National Railway (CNI)
  • Canadian Pacific Railway (CP)
  • CSX Corporation (CSX)
  • Kansas City Southern
  • Norfolk Southern (NSC)
  • Union Pacific (UNP)

Investors interested in dividend ETFs can opt for the Vanguard Dividend Appreciation ETF (VIG). All US Class I railroads are part of the portfolio holdings of VIG.

For more information on the previous week’s rail traffic, please visit Market Realist’s report on weekly rail traffic. In this series, we will take a look into all US Class I railroad’s rail traffic for the week ended April 9, 2016.

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