uploads///CNI Carloads

Behind Canadian National Railway’s Number 1 Position in Week 28

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Jul. 24 2017, Updated 7:40 a.m. ET

CNI’s railcars in week 28

The first 28 weeks of 2017 are over, and Canadian National Railway’s (CNI) freight rails continue to run on the fast track. CNI has beaten all its Class I peers in terms of YoY (year-over-year) volume growth so far in 2017.

In the week ended July 15, 2017, Canadian National Railway registered a double-digit growth in railcars. That week, CNI’s carloads rose 11.2% YoY, compared with the 28th week of 2016. The company moved 60,000 railcars, compared with ~54,000 railcars one year previously.

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Excluding coal and coke railcars, other railcars reported a 13.8% gain. These railcars normally account for slightly less than 90% of the overall railcars of Canadian National Railway. The company’s coal and coke railcars, however, shrank 5% to 6,300 carloads, compared with 6,700 units one year ago.

Canadian National Railway witnessed a 13.1% YoY rise in railcars in the first 28 weeks of 2017—almost double the 6% volume gain of US railroads during the same period.

Intermodal traffic

CNI’s overall intermodal volumes exhibited a robust gain of 18.3% YoY in 2017. The intermodal traffic of Canadian National Railway is solely represented by containers. The company hauled close to 50,000 containers last week, compared with ~42,000 containers in the same week last year.

In intermodal traffic, Canadian National Railway recorded a 12.7% YTD (year-to-date) gain. This compares with the 2.9% volume growth recorded by US railroads overall in the first 28 weeks of 2017.

Remember, railroads are four times fuel efficient than trucks. With improvements in overall freight volumes in 2017, the first gainers will be transportation stocks. Investors interested in exposure to transport companies can consider the Industrial Select Sector SPDR ETF (XLI). General Electric (GE), Boeing (BA), and 3M Company (MMM) are all included in XLI’s portfolio.

In the next part, we’ll cover the freight volumes of Canadian Pacific Railway (CP).

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