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Comparing CSX’s Intermodal Volumes in Week 14 of 2017

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CSX’s intermodal volumes

In recent weeks, CSX’s (CSX) intermodal traffic was almost flat. In the week ended April 8, 2017, its intermodal volumes rose to 0.50%. Overall intermodal volumes reached more than 54,000 compared to ~53,600 units in the week ended April 9, 2016. Trailer volumes fell 1.9% at 1,900 units compared to last year.

In the 14th week of 2017, CSX’s intermodal volumes were lower than rival Norfolk Southern’s (NSC) and much lower than the rise reported by US railroad companies overall.

If you want to compare this week’s freight volume data with the previous week’s data, be sure to visit Market Realist’s Week 13: US Freight Rail Volumes on a Growth Trajectory.

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Why intermodal matters for CSX

Key corridors such as I-95, I-90, and certain Southeastern US corridors drive growth in merchandise and intermodal volumes. CSX expects 96.0% clearance for its double-stack container traffic on the East Coast at the end of 2017. Its 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 to intermodal business growth. The company expects some short-haul volume losses in the domestic intermodal space over the next few quarters. It’s hopeful that the implementation of trucking regulations such as the electronic logging device could tighten truck capacity. These regulations could lead to higher intermodal volumes in the future.

Railroad companies (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 transportation, given the latter’s heavy reliance on highways.

ETFs

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 railroad companies are included in MOAT’s portfolio.

Continue to the next part to learn about Union Pacific’s (UNP) freight volumes and its trends.

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