BNSF Railway’s intermodal volumes

In the 16th week of 2017, BNSF Railway’s (BRK-B) overall intermodal traffic fell 4% YoY (year-over-year) to more than 93,000 containers and trailers. This was more than the nearly 97,000 containers in the corresponding week of 2016. The company’s container volumes fell 4.2% to ~84,000 containers in the 16th week of 2017.

BNSF’s trailer volumes fell 2.2% YoY to ~9,500 trailers. The fall in the company’s intermodal traffic was higher than the overall fall reported by US railroad companies in the same category.

Unpacking BNSF Railway’s Intermodal Traffic in Week 16

Are intermodal volumes vital to BNSF?

BNSF Railway includes domestic and international intermodal operations in its Consumer Products Freight business, which also includes automotive freight. This segment accounted for ~30.0% of the company’s total revenue in 2016.

It’s worth noting that BNSF Railway accounted for ~50.0% of total Western US freight rail traffic in 2016. The company handles 1.0 million more intermodal units every year than any other Class I railroad company. Its intermodal volumes represent nearly 50.0% of its business portfolio.

BNSF’s intermodal competition

BNSF Railway faces tough competition from truckers such as J.B. Hunt Transport Services (JBHT) and Swift Transportation (SWFT) in the intermodal space. Intermodal volumes are impacted by seasonality, highway-to-rail conversions, and access to certain high-traffic ports.

If you’re interested in the transportation space, you could consider the WisdomTree Earnings 500 ETF (EPS). All US-born Class I railroad companies are included in EPS’s portfolio.

In the next article, we’ll take a look at the carloads of the smallest US Class I railroad company, Kansas City Southern (KSU).

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