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Kansas City Southern’s Coal Fall Lowered Its Volume Growth

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Kansas City Southern’s freight volumes

The week ended June 17, 2017, saw Kansas City Southern’s (KSU) overall railcars rise 4.3% over the same week last year. The company hauled ~25,000 railcars in the week, compared to ~21,000 railcars in week 24 of 2016.

The company’s total carloads excluding coal and coke traffic expanded 8% YoY (year-over-year) to reach ~21,000 units, compared to over 19,000 units in the week ended June 18, 2016.

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Solid growth in KSU’s coal volumes

Kansas City Southern’s overall coal and coke carloads have been rising significantly in the last few weeks. However, the company’s week 24 data show a break in that trend. The company’s coal and coke (ANR) carloads fell ~12% in the week. It hauled ~4,000 coal and coke railcars, compared to 4,500 in the same week in 2016.

Rising and falling commodity groups

In the week ended June 17, 2017, the rising commodity groups were as follows:

  • grain
  • crushed stone, sand, and gravel
  • pulp, paper, and allied products
  • chemicals and allied products
  • petroleum products

The commodity groups that posted volume falls were as follows:

  • grain mill products
  • food and kindred products
  • waste and non-ferrous scrap
  • iron and steel scrap

If you want to opt for indirect exposure to logistics sector stocks, you can consider investing in the iShares US Industrials ETF (IYJ). Major US railroad companies (BRK-B) and airlines (JBLU) make up a combined ~11% of IYJ’s portfolio holdings.

Keep reading to learn more about Kansas City Southern’s intermodal volumes in week 24.

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