uploads/2017/06/KSU-Carloads-1.png

Kansas City Southern: Commodities Leading the Volume Rise in Week 23

By

Updated

Kansas City Southern’s carloads

In the week ended June 10, 2017, Kansas City Southern’s (KSU) total railcars rose 11.2% compared to the corresponding week of 2016. Kansas City Southern hauled 25,500 railcars in the week, compared to nearly 23,000 units in the week ended June 11, 2016. The company’s carloads other than coal and coke rose 11.9% YoY (year-over-year).

Article continues below advertisement

Solid growth in KSU’s coal volumes

Kansas City Southern’s recent growth in coal and coke carloads (ANR) has been notable. However, there was a break in the percentage rise of these carloads. The company’s coal and coke carloads rose 8.6% in week 23 of 2017. The company hauled ~4,700 railcars of coal and coke, compared to more than 4,300 carloads in the corresponding week of 2016.

Revenues for KSU’s Energy segment rose substantially in 1Q17, increasing 64%. This increase was mostly due to higher utility coal volumes. These volumes rose due to increased natural gas prices and lower coal inventory levels.

Rising and falling commodities

In the week ended June 10, 2017, the commodity groups that posted a rise were:

  • grain
  • crushed stone, sand, and gravel
  • paper, pulp, and allied products
  • petroleum products
  • motor vehicles and equipment

The major declining commodity groups were grain mill products, food and kindred products, waste and non-ferrous scrap, and iron and steel scrap.

Investors interested in the transportation sector could consider investing in the iShares US Industrials ETF (IYJ). Major US railroad companies (UNP) and airlines (DAL) make up 6.2% and 4.8% of IYJ’s portfolio, respectively.

Next, we’ll take a look at Kansas City Southern’s intermodal traffic in week 23.

Advertisement

More From Market Realist