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Comparing BNSF’s Intermodal Rise with UNP’s in Week 19

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BNSF Railway’s intermodal volumes

In the 19th week of 2017, BNSF Railway’s (BRK-B) overall intermodal traffic rose 6.3% YoY (year-over-year) to ~101,000 containers and trailers, compared to 95,000 containers in the corresponding week of 2016. The company’s container volumes rose 6.3% to ~91,000 containers. Its trailer volumes rose 7% YoY to ~10,000 trailers.

The rise in the company’s intermodal traffic was higher than the rise reported by US railroad companies overall. BNSF’s percentage rise in intermodal volumes was three times higher than rival Union Pacific’s (UNP).

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Are intermodal volumes vital to BNSF?

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

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 may want to 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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