Canadian Pacific’s carloads

Canadian Pacific’s (CP) total carloads rose a 7.6% in the week ended February 18, 2017. The company hauled ~31,000 railcars that week, compared with ~29,000 in the corresponding week of 2016. CP’s railcars, excluding coal, rose 11.7% YoY (year-over-year) to settle at more than 26,000 units, compared with 23,000 railcars in the week ended February 20, 2016.

Comparing Canadian Pacific’s Carloads

Canadian Pacific normally receives 70% of its revenue from Canada and 30% from the United States. CP’s coal carloads fell 10.2% YoY in the seventh week of 2017, whereas rival railroad Canadian National (CNI) reported a YoY fall of 2.1%.

Why coal carloads matter to CP

Coal accounted for 11% of Canadian Pacific’s (CP) revenue and 12% of its carloads in 2016. 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.

During 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.

Notably, all US-born Class I railroads (UNP) are included in the portfolio holdings of the WisdomTree Earnings 500 ETF (EPS). If you want to compare this week’s freight volume data with the previous week’s, check out Market Realist’s A Light at the End of Tunnel: Rail Traffic, Week Ended February 11.

Commodity groups

In the week ended February 18, 2017, the major advancing commodity groups were as follows:

  • Canadian grain
  • US grain
  • potash
  • chemicals and plastics
  • fertilizer and sulfur

The major commodity groups that reported declines were the following:

  • crude
  • automotive

In the next and final part of this series, we’ll take a look at the changes in Canadian Pacific’s intermodal traffic.

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