BNSF Railway: Behind Its Intermodal Volumes in Week 23



BNSF Railway’s intermodal volumes

In week 23 of 2017, BNSF Railway’s (BRK-B) total intermodal traffic rose 7.8% YoY (year-over-year) to ~105,000 containers and trailers, compared to 97,000-plus units in the corresponding week of 2016. The company’s container volumes rose 8.3% to over 94,000 containers, while trailers rose 3.5% YoY to around 11,000 trailers.

Notably, BNSF Railway’s intermodal volumes grew at a faster rate than the rise registered by US railroads, measured in percentage terms. BNSF’s percentage rise in intermodal volumes was twice than that seen by rival Union Pacific (UNP) during the reported week.

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BNSF’s intermodal volumes

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 revenues. In 1Q17, BNSF Railway’s domestic intermodal revenues rose, in contrast to other major railroads that reported weakness on that front.

BNSF reported higher market share in the intermodal space in 1Q17. The inventory-to-sales ratio has been falling in 2017, which means that retail inventory levels are returning to normal. This trend also boosted the intermodal volumes of BNSF Railway which rose 6% in 1Q17.

ETF investment

Investors interested in the transportation space can consider the SPDR S&P Transportation ETF (XTN). This ETF holds 26% in major trucking companies (SWFT) and 13.9% in major US railroads (UNP).

Next, we’ll cover Kansas City Southern’s (KSU) freight volumes.


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