Canadian Pacific’s carloads

Canadian Pacific Railway’s (CP) total carloads rose 24.7% in the week ended May 13, 2017. The company hauled more than 32,000 railcars in the week, similar to its total carloads in the corresponding week of 2016. CP’s railcars excluding coal rose 19.3% YoY (year-over-year) to settle at more than 25,000 units, compared to ~21,000 units in the week ended May 14, 2016.

Canadian Pacific Railway normally earns 70.0% of its revenue from Canada and 30.0% from the United States. Its non-coal carloads rose 19.3% YoY in the 19th week of 2017, whereas Canadian National Railway (CNI) reported a YoY rise of 16%.

A Snapshot of Canadian Pacific Railway’s Week 19 Freight Traffic

Intermodal traffic

Canadian Pacific Railway’s intermodal volumes have been rising for the past few weeks. In the week ended May 13, 2017, it reported a 4% rise in overall intermodal traffic to ~19,000, compared to nearly 18,000 carloads in the corresponding week last year.

Do coal carloads matter to CP?

Coal accounted for 11.0% of CP’s revenue and 12.0% of its carloads in 2016. The company mainly transports metallurgical coal meant for export through Metro Vancouver’s port. Its coal traffic in Canada begins primarily at Teck Resources’ (TCK) mines in southeast British Columbia.

During the past year, coal production and demand have been under pressure due to depressed prices, environmental concerns, and a shift away from coal-fired power plants to natural gas–based electricity generation. In fact, US steel producers’ capacity utilizations didn’t see any marked improvement in 1Q17, either. All US-based Class I railroad companies (UNP) are included in the portfolio holdings of the WisdomTree Earnings 500 ETF (EPS).

Commodity groups

In the week ended May 13, 2017, the major rising commodity groups for Canadian Pacific were as follows:

  • potash
  • metals, minerals, and consumer products
  • grain

The major commodity groups that fell were as follows:

  • chemicals and plastic
  • automotive

In the next article, we’ll review the freight traffic performance of Genesee & Wyoming (GWR) in April 2017.

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