uploads///KSU Carloads

Analyzing Kansas City Southern’s Carloads Last Week

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Mar. 15 2017, Updated 9:06 a.m. ET

Kansas City Southern’s carloads

In the week ended March 4, 2017, Kansas City Southern’s (KSU) total railcars rose 12% from the corresponding week of 2016. Last week, KSU hauled ~26,000 railcars as compared to ~23,000 units in the week ended March 5, 2016. Carloads other than coal and coke rose ~4% YoY (year-over-year).

KSU’s recent growth in coal and coke carloads has been nothing short of remarkable. The company’s coal and coke carloads rose a staggering 58.5% in the ninth week of 2017, and KSU hauled ~5,400 railcars of coal and coke as compared to 3,400 carloads in the corresponding week of 2016.

If you’d like to compare this week’s freight volume data with the previous week’s, check out Market Realist’s US Freight Traffic Takes the High Rail: Week Ended February 25.

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Are coal carloads vital to KSU?

Utility coal, other coal, and petroleum coke accounted for 9% of KSU’s total revenue in 2016. The share of these commodities’ carloads in total carloads was 11.7% in 2016. Although the percentage may not seem significant, it’s noteworthy given the company’s small scale of operations.

The company moves coal originating from the Powder River Basin in Wyoming and coal mined in the US Midwest. Coal producers operating in that region, which include Alpha Natural Resources (ANR) and Peabody Energy (BTU), anticipated weak coal shipments in 2016. Black Hills (BKH) operates in the same region but doesn’t produce coal commercially.

Investors interested in the transportation sector could consider investing in the iShares US Industrials ETF (IYJ). Major US railroads make up 6.2% of IYJ’s portfolio.

Advancing and declining commodities

In the week ended March 4, 2017, the following commodity groups advanced:

  • chemicals and allied products
  • petroleum products
  • metals and products
  • motor vehicles and equipment
  • iron and steel scrap

Major commodities that fell in the sixth week include the following:

  • metallic ores
  • grain mill products
  • food and Kindred products
  • pulp, paper, and allied products
  • stone, clay and glass products

In the next part, we’ll focus on KSU’s intermodal volumes.

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