BNSF Railway’s intermodal volumes

In the 18th week of 2017, BNSF Railway’s (BRK-B) overall intermodal traffic rose 1.4% YoY (year-over-year) to ~97,600 containers and trailers, compared with 96,300 containers in the corresponding week of 2016. The company’s container volumes rose 1% to ~87,600 containers.

BNSF’s trailer volumes rose 4.8% YoY to ~10,100 trailers. The rise in the company’s intermodal traffic was higher than the overall increase reported by US railroad companies in the same category.

BNSF Railway: How Its Intermodal Fared in Week 18

Are intermodal volumes vital to BNSF?

BNSF Railway’s Consumer Products Freight business includes domestic and international intermodal operations, as well as automotive freight. This segment accounted for ~30% of the company’s total revenues in 2016.

It’s worth noting that BNSF Railway accounted for ~50% of Western US freight rail traffic in 2016. The company handles 1.0 million more intermodal units per year than any other Class I railroad company. Its intermodal volumes represent nearly 50% 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 this EPS 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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