uploads///UNP Carloads

Union Pacific: Which Commodities Led the Volume Slump in Week 37?


Nov. 20 2020, Updated 5:18 p.m. ET

UNP’s railcar volumes

In the week ended September 16, 2017, it seems like Union Pacific’s (UNP) freight volumes were affected by Hurricane Harvey’s aftermath. That week, the company recorded a 1.7% fall in railcar volumes. Its railcar traffic totaled ~96,000 units compared to ~97,000 units in the week ended September 17, 2016.

UNP’s other-than-coal and coke carloads rose marginally 0.60% to ~72,000 railcars in the 37th week of 2017. However, its coal and coke carloads fell 8.3%. The company moved ~23,600 coal and coke (ARLP) railcars in the reported week compared with ~26,000 railcars a year before.

Union Pacific dominates the Western United States, competing with Berkshire Hathaway–owned BNSF Railway (BRK.B). In terms of the size of freight volumes, BNSF Railway leads its Class I peers, including UNP.

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Advancing and declining commodity groups

In Week 37, these commodity groups drove UNP’s volumes higher:

  • crushed stone, sand, and gravel
  • lumber and wood
  • chemicals

Commodities that pulled down freight volumes were the following:

  • grain
  • grain mill products
  • petroleum products
  • motor vehicles and equipment
  • stone, clay, and glass products

Intermodal traffic in Week 37

In line with the fall in railcars, Union Pacific witnessed a fall in its intermodal volumes in the 37th week of 2017. Its intermodal traffic contracted 3.5% in the reported week to ~72,000 trailers and containers compared to ~75,000 units in the same week last year.

Container volumes declined 3.5%, whereas trailer traffic fell 4.3% in the week ended September 16, 2017.

Investing in ETFs

With crude oil rising along with the rise in overall coal prices, the chances of rail stocks catching momentum are high. If you’re interested in transportation stocks in 2018, you could invest in the iShares US Industrials (IYJ). Major US airlines (DAL) and railroads combined make up ~11.0% of IYJ’s holdings.

Next is an update on BNSF Railway’s volumes.


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