This Sharp Rise Lifted BNSF Railway’s Intermodal Volumes



BNSF Railway’s intermodal volumes

Which Commodity Groups Pushed Up BNSF Railway’s Carloads? In the same week, container traffic rose 34.9% on a YoY (year-over-year) basis to 81,000 containers, up from 60,000 units in the corresponding week of 2015.

The percentage rise reported by BNSF’s intermodal volumes was on par with the rise reported by US railroads, in the same category. The huge 50% rise in BNSF’s trailer traffic drove the overall rise in intermodal volumes in the 51st week of 2016.

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Why is intermodal important to BNSF?

BNSF Railway’s domestic and international intermodal operations are part of its consumer products freight business. The business also includes automotive freight earned by the company. It’s worth noting that this segment accounted for ~31.0% of BNSF’s total revenue in 2015.

The company’s share of western US rail traffic in 2015 was ~50.0%. The company handles a million more intermodal units every year than any other Class I railroads. Intermodal represents nearly 50.0% of BNSF’s business portfolio by volume.

BNSF’s intermodal competition

BNSF Railway also faces tough competition from truckers like J.B. Hunt Transport Services (JBHT) and Swift Transportation (SWFT) in the intermodal space. We should note that intermodal volumes are impacted by seasonality, highway-to-rail conversions, and access to certain high traffic ports.

If you’re interested in the transportation space, you might invest in the Wisdom Tree Earnings 500 ETF (EPS). All US-born Class I railroads are included in the portfolio holdings of EPS.

In the next part, we’ll take a look at the carloads of the smallest US Class I railroad, Kansas City Southern (KSU).


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