Canadian Pacific’s carloads

Canadian Pacific Railway’s (CP) total carloads rose 15.0% in the week ended April 29, 2017. The company hauled more than 34,000 railcars that week, similar to its total carloads in the corresponding week of 2016. CP’s railcars, excluding coal, rose 7.4% YoY (year-over-year) to settle at more than 27,000 units, compared with ~25,500 units in the week ended April 30, 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 7.4% YoY in the 17th week of 2017, whereas Canadian National Railway (CNI) reported a YoY rise of 16.0%.

Coal Boosts Canadian Pacific’s Volumes in Week 17

Intermodal traffic

Canadian Pacific Railway’s intermodal volumes have been rising for the past few weeks. In the week ended April 29, 2017, it reported an 8.9% rise in overall intermodal traffic to ~20,100 from nearly 18,500 carloads in the corresponding week last year.

Why 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 a marked improvement in the recent quarter either. All US-born Class I railroad companies (UNP) are included in the portfolio holdings of the WisdomTree Earnings 500 ETF (EPS).

Commodity groups

In the week ended April 29, 2017, major rising commodity groups for Canadian Pacific were as follows:

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

The major commodity groups that fell were the following:

  • chemical and plastic
  • automotive

To compare this week’s freight volume data with the previous week’s data, check out Market Realist’s Week 16: US Freight Rail Traffic Is in Zigzag Mode. For more information on major US railroad stocks, visit Market Realist’s Railroads page.

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