Canadian Pacific’s carloads

Canadian Pacific’s (CP) total carloads fell 4.5% in the week ended January 14, 2017. The company hauled more than 29,000 railcars that week, compared with ~30,000 in the corresponding week of 2016. CP’s railcars, excluding coal, rose slightly to settle at 24,500 units in the second week of 2017, compared with ~24,000 railcars in the week ended January 16, 2016.

Why Canadian Pacific’s Carloads Slumped in Second Week of 2017

Canadian Pacific normally receives 70% of its revenue from Canada and 30% from the United States. CP’s coal carloads fell 26.2% to 4,600 railcars, in contrast with the rise reported by Canadian National (CNI) in the week ended January 14, 2017.

Why coal carloads matter to CP

Coal accounted for 10.6% of Canadian Pacific’s (CP) revenue and 12.3% of its carloads in 3Q16. The company mainly transports metallurgical coal meant for exports through Metro Vancouver’s port. Its coal traffic in Canada begins primarily at Teck Resources’ (TCK) mines in southeastern British Columbia.

For the past year, coal’s production and demand have been under pressure due to depressed prices, environmental concerns, and a shift from coal-fired power plants to natural gas-based electricity generation. US steel producers’ capacity utilization didn’t see a marked improvement in the recent quarter either. All US-born Class I railroads (UNP) are included in the portfolio holdings of the WisdomTree Earnings 500 ETF (EPS).

Commodity groups

The commodity groups of Canadian and US grain, metals and minerals, and potash rose in volume in the week ended January 14, 2017. Volumes of fertilizer and sulfur, forest products, crude, and automotive fell during the same week. In the final part of this series, we’ll take a look at the changes in Canadian Pacific’s intermodal traffic.

Latest articles

Marathon Petroleum (MPC) stock has been tumbling in Q3, driven by geopolitical tensions, oil price uncertainty, and weaker refining conditions.

This week, AT&T CEO Randall Stephenson noted that AT&T (T) is on track to reduce its leverage multiple to about 2.5x by the end of this year.

Jeff Bezos announced that Amazon had placed an order of 100,000 electric delivery vans from Michigan-based startup Rivian.

Bad news on the trade war front appears to have led to a fall in the broader US equity markets today. Cannabis ETFs were also trading in the red.

Energy Transfer (ET) stock has recovered in the last two trading sessions after investors hammered it on its plans to acquire SemGroup (SEMG).

Software-as-a-service company Datadog (DDOG) made a smashing debut on Wall Street yesterday. After its IPO, DDOG's shares surged 40% in intraday trading.