US rail 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 July 30, 2016. For the week, the US carloads (UNP) fell by 5.3% to more than 274,000 units from nearly 290,000 units in the week ended August 1, 2015.
In this series, we’ll discuss all major US rail traffic for the week ended July 30, 2016. You can compare this week’s rail data from the previous week in What the Latest Rail Traffic Means for Investors: Week Ending July 23.
US intermodal traffic also declined by 2.6% to ~263,000 units from nearly 270,000 units during the same period last year. On an overall basis, the US total freight rail traffic in the week ended July 30, 2016, declined by 4%.
Four out of ten carload commodity groups registered volume growth in the week ended July 30. Miscellaneous volumes rose by 16.7%, followed by grain (up by 14.9%) and chemicals (up by 3.1%).
The declining commodity groups were petroleum and petroleum products (down 25%), coal (ARLP) (down 12.2%), and forest products (down 8.1%).
Canadian and Mexican rail traffic
Canadian rail traffic (CNI) recorded a decline of 6.7% for the week, but Canadian railroads’ intermodal traffic rose by 2.5% in the same period, while the carloads of Mexican railroads (KSU) recorded a fall of 12.1%, and Mexican intermodal traffic tanked 42.7%.
There are 13 railroads that submit weekly data. These carriers handle about 95% of total US and Canadian freight traffic. Class I railroads (BRK-B) account for the lion’s share of freight rail movement.
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.
Let’s move now to Norfolk Southern.