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Understanding Union Pacific’s Week 26 Intermodal Volumes

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UNP’s intermodal traffic in week 26

Unlike BNSF Railway (BRK-B), Union Pacific (UNP) reported a slight fall in overall intermodal volumes expressed in containers and trailers. In fact, the company’s volumes hardly changed noticeably in the 26th week of 2017.

Union Pacific moved ~76,000 containers and trailers that week, which was down 0.3% from the levels in the same week of 2016. UNP’s container traffic was slightly lower at ~73,000 units.

The company’s trailer traffic fell 3.9% in the 26th week of 2017. Union Pacific’s trailer volumes have been usually between 4%–5% of overall intermodal volumes.

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UNP’s intermodal traffic in the first 26 weeks

UNP’s total intermodal volumes rose 1% in the first six months of 2017. While container volumes grew 1%, trailer units dropped by 2% during the same time.

Intermodal units for reporting US railroads in the first 26 weeks of 2017 rose 2.7%. Union Pacific’s growth clearly lags behind the rise registered by the overall US industry.

After seeing falls 2015 and 2016, however, Union Pacific’s intermodal volumes are showing a rising trend in 2017. The company’s intermodal segment rivals with major truck carriers like Swift Transportation (SWFT) and J.B. Hunt Transport Services (JBHT).

Investing in ETFs

The transportation sector is a subset of the industrials sector. Investors wishing to opt for indirect exposure to transport and logistics companies can consider the iShares US Industrials ETF (IYJ), which has major US railroads (UNP) and main airlines (JBLU) in its portfolio.

Next, we’ll review BNSF Railway’s (BRK-B) freight traffic in the 26th week of 2017.

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