uploads///CNI Carloads

Canadian National Railway: Growth Undeterred by Coal’s Fall in Week 23

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Dec. 4 2020, Updated 10:43 a.m. ET

Canadian National’s carloads

Since the beginning of 2017, Canadian National Railway’s (CNI) steadily rising YoY (year-over-year) volumes have become a discussion topic among analysts and the investor community.

In the week ended June 10, 2017, CNR’s overall volumes rose 11.4% on a YoY basis. In the same week, its railcar volumes rose to ~61,000 units, compared to ~55,000 units in the comparable week of 2016. The company’s railcar volumes minus coal and coke grew 15.6% in week 23 of 2017.

The company was successful in averting a labor strike and reached a tentative agreement with the union representing 3,000 employees. This eased the tension experienced by the company’s customers and investors.

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Coal and Canadian National Railway 

In contrast to the industry’s trend, CNI’s coal carloads contracted 20% in week 23 of 2017. The company moved ~5,000 coal and petroleum coke railcars in the week. 

The percentage fall in Canadian National’s coal volumes was in contrast with the flat report for rival Canadian Pacific (CP) in the same category. Coal doesn’t form more than 5% of CNI’s total volumes. As a result, the company’s exposure to coal is more limited in the peer group.

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 (JBHT) and 13.9% in major US railroads (UNP).

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