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How Norfolk Southern’s Freight Rail Volumes Trended in Week 32

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Norfolk Southern’s railcars

Norfolk Southern (NSC), a major freight railroad in the Eastern United States, competes with CSX (CSX). In the week ended August 12, 2017, Norfolk Southern reported a 5% rise in overall freight volumes. The company hauled ~70,000 units during the week compared with ~67,000 units in the comparable week last year.

Excluding coal and coke, other railcars fell 0.3% to 48,000 plus units in week 32 of 2017. The coal and coke railcar volume was up 19% in the same week. The coal and coke carloads rose to ~22,000 units from ~18,000 railcars in the week ended August 13, 2016. Notably, NSC’s coal (ANR) and coke volume increases were much higher compared with the marginal growth reported by US railroads in the 32nd week.

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Commodity groups’ volume change

In the 32nd week of 2017, Norfolk Southern reported volume gains in commodities such as chemicals, crushed stone, sand and gravel, metals and products, and grain mill products. On the contrary, food and kindred products, motor vehicles, petroleum products (SLB), and pulp, paper, and allied products witnessed contractions in shipments.

Intermodal volumes

Norfolk Southern’s intermodal volumes saw 3.8% growth in week 32. The company’s intermodal traffic went to ~82,000 containers and trailers compared with ~79,000 units in the 32nd week of 2017. NSC’s container volumes jumped 2.7% to over 74,000 against over 72,000 containers in the same week last year. Trailers accounted for less than 10% of intermodal volumes and saw a 16.5% rise in volumes to 7,300 units in the week ended August 12, 2017.

In the first 32 weeks, Norfolk Southern’s container volumes were up 4.1% to over 2.2 million units on a year-over-year basis. Trailer traffic was up 14.9% in the same period to ~0.3 million trailers.

ETF investment

The US industrial output has been growing at a slow pace in 2017. However, the freight prospects of railroads have gotten better compared to last year. Investors who want exposure to transportation stocks can consider investing in the iShares US Industrials ETF (IYJ). This ETF holds 5.7% of its portfolio in major US railroads.

In the next article, we’ll look at CSX’s freight volumes.

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