Comparing BNSF Railway’s Intermodal Growth to Its Peers’



BNSF Railway’s intermodal volumes

In the week ended June 24, 2017, BNSF Railway’s (BRK-B) intermodal traffic rose 7.1% YoY (year-over-year) to 105,000 containers and trailers, compared to ~97,000 containers and trailers in the 25th week of 2016.

The rise in the company’s container traffic was more than just trailers in the reported week. While container volumes rose 7.4% to ~94,000 units, trailer volumes rose 4.4% in the week ended June 24, 2017.

In terms of volumes, BNSF Railway’s intermodal traffic is the highest among all Class I railroad companies. The company has an edge over rival Union Pacific (UNP) due to its competitive pricing and robust franchise.

While US railroad companies’ intermodal volumes rose 4.3% in the week, BNSF witnessed a rise of almost twice as much in the same category.

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BNSF’s intermodal volumes

BNSF’s intermodal and automotive revenues contributed nearly 30% of its total freight revenue in 2016. BNSF has a strong domestic and international intermodal business. It’s the only Class I railroad company that has an office in China, which comes handy for its international shippers.

On the domestic intermodal front, BNSF Railway expects that it has ~8.0 million truckloads in the Western United States with the potential for highway-to-rail conversion. With its seamless network and strong service, BNSF expects to see a piece of this conversion in the coming quarters.

ETF investment

Investors willing to opt for indirect exposure to transportation stocks may consider investing in the SPDR S&P Transportation ETF (XTN). This ETF holds nearly 40% in prominent truck carriers (SWFT) and major US railroad companies (UNP).

In the next article, we’ll focus on Kansas City Southern’s (KSU) freight traffic in week 25.


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