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How Union Pacific’s Freight Rail Volumes Fared in Week 32

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Aug. 23 2017, Updated 7:37 a.m. ET

UNP’s freight volumes in week 32

Union Pacific (UNP) along with Berkshire-Hathaway-owned BNSF Railway (BRK-B) dominate the Western US rail freight market. In the week ended August 12, 2017, Union Pacific registered a 1% fall in its freight volumes excluding intermodal. The company moved 96,000 plus railcars in the same week against over 97,000 units last year. Excluding coal and coke railcars, UNP’s railcars contracted 1.4% in the reported week to ~70,000 against 71,000 in the 32nd week of 2016. Union Pacific witnessed a volume contraction in the reported week compared with a minor positive change in shipments reported by US railroads (CSX).

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UNP’s coal volumes

Union Pacific’s coal (CNX) and coke railcars volume moved upwards very marginally and were almost equal to last year’s 26,500 railcars in week 32. In contrast with Union Pacific’s status quo in coal carloads, rival BNSF Railway saw a 22.4% volume rise in the same category in the 32nd week of 2017.

UNP’s intermodal traffic

Unlike railcar volumes, Union Pacific witnessed a 1.9% increase in intermodal volumes. In the week ended August 12, 2017, UNP’s container and trailer volumes were above 74,000 compared with ~73,000 units in the week ended August 13, 2016. When compared with the overall US railroads average, the company’s intermodal growth lagged behind in 2017.

Union Pacific’s container traffic normally exceeds 95% of total intermodal units. In the 32nd week, container traffic was up 1.9% to ~72,000 containers against ~70,000 plus units in the corresponding week of 2017. Trailer traffic was up 2.8% to around 2,600 units in the reported week compared with 2,500 units in week 32 last year.

ETF option

With a slight improvement in the freight volume scenario, transportation stocks could go up in the quarters to come. If you are interested in transportation stocks, you can consider the iShares US Industrials ETF (IYJ). Airlines and railroads account for 4.6% and 5.7% of the portfolio holdings of IYJ, respectively.

Read the next article for a review of BNSF Railway’s (BRK-B) freight traffic.

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