uploads///CSX Intermodal

Looking at CSX’s Intermodal Volumes in the 7th Week of 2017

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Nov. 20 2020, Updated 1:59 p.m. ET

CSX’s intermodal volumes

In the week ended February 18, 2017, CSX’s (CSX) total intermodal traffic went up 7.9%. Overall intermodal volumes reached ~55,500 in the seventh week of 2017. However, trailer volumes fell 9.5%.

The percentage fall in CSX’s trailer traffic contrasted with the rise reported by rival Norfolk Southern (NSC). In the same week of 2017, the percentage rise in CSX’s overall intermodal traffic was in line the rise reported by US railroads—including by rival NSC.

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 Why intermodal matters for CSX

Key corridors, such as the I-95, the I-90, and some Southeastern US corridors, drive growth in merchandise and intermodal volumes. CSX expects a 95% clearance at the end of 2016 for its double-stack container traffic on the East Coast. CSX’s new Carolina Connector terminal is expected to provide hub connectivity to additional lanes in the Mid-Atlantic market.

For CSX, excess truck capacity is a deterrent for intermodal business growth. The company expects some short-haul volume losses in the domestic intermodal space over the next few quarters.

However, for 2017, the company is hopeful that the implementation of trucking regulations, such as the electronic logging device, will tighten truck capacity. These regulations should provide scope for higher intermodal volumes going forward.

Railroads (GWR) are four times more fuel efficient than trucks (JBHT), and about half of US rail intermodal volume consists of imports and exports. Railroads are also more environmentally desirable than truck freight transport, given the latter’s heavy reliance on highways.

ETF investment

If you prefer broad-based exposure to the transportation space, you could consider the VanEck Vectors Morningstar Wide Moat ETF (MOAT). All major US-originated railroads are included in MOAT’s portfolio.

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. In the next part, we’ll look at Union Pacific’s (UNP) railcar traffic.

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