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Canadian National’s Intermodal Volumes Compared to CP

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Nov. 20 2020, Updated 3:48 p.m. ET

Canadian National’s intermodal volumes

In the week ended August 20, 2016, Canadian National Railway’s (CNI) overall intermodal fell 5.5%. Container volumes fell 4% in the same week against the corresponding week last year.

There was no movement for trailers in the reported week of 2016. The fall in CNI’s intermodal volumes was noticeable against the rise reported by Canadian Pacific (CP) in the week ended August 20, 2016.

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Why is intermodal important for CNI?

The intermodal business contributed ~24% to CNI’s 2015 and previous year’s revenues. Of its total carloads last year, intermodal’s share was 40.7%, a rise of 37.1% in 2014. Canadian National also operates one of the largest trucking services in Canada.

Canadian National’s competitive advantage comes from its sole access to the Port of Prince Rupert in British Columbia. In addition, CNI connects with Vancouver, British Columbia, and Prince Rupert, British Columbia, in a long arc. This, in turn, provides opportunities for the company to move containers from Asia to the US heartland.

CNI’s domestic segment is driven by consumer markets and the general US and Canadian economic growth. Its international segment is influenced by North American economic and trade conditions.

In the intermodal segment, the company also faces competition from trucking companies such as J.B. Hunt Transport Services (JBHT), Heartland Express (HTLD), Swift Transportation (SWFT), and Landstar System (LSTR).

Investors opting for an exposure to the transportation sector can invest in the Guggenheim S&P 500 Equal Weight ETF (RSP). All US-originated Class I railroads make up RSP’s portfolio holdings.

You can compare this week’s rail data from the previous week in North American Freight Rail Traffic Fell in Week Ended August 13.

For more information on US major railroad stocks, visit Market Realist’s Railroads page.

In the next part, we’ll take a look at CNI’s arch rival, Canadian Pacific (CP), and its weekly rail traffic data.

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