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Kansas City Southern: Inside the Freight Volume Rise in Week 42

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KSU’s railcars in week 42

Kansas City Southern (KSU), the smallest Class I railroad, recorded 3.7% volume gains in the week ended October 21, 2017. The company’s total carloads (excluding intermodal) rose to ~25,800 units in the same week compared with ~25,000 railcars in the week ended October 22, 2016.

KSU’s overall volume growth was limited by a 3% fall in coal (CNX) and coke volumes in week 42 of 2017. From ~4,800 carloads in week 42 of 2016, these railcars totaled 4,650 in the reported week in 2017. 

However, carloads excluding coal and coke gained 5.3% to more than 21,000 railcars from slightly more than 20,000 units a year before.

Progressing and regressing commodity groups

For Kansas City Southern, these carloads surged in the 42nd week:

  • crushed stone, sand, and gravel
  • pulp, paper, and allied products
  • petroleum products
  • metals and products
  • motor vehicles and equipment

The commodity groups where volumes regressed in the same week were:

  • grain mill products
  • food and kindred products
  • chemicals and allied products

KSU’s intermodal volumes

On the intermodal front, Kansas City Southern saw an 8.1% rise in its containers and trailers traffic in the week ended October 21, 2017. The company’s intermodal traffic totaled 21,800 units in that week compared with more than 20,000 units in the week ended October 22, 2016.

Container traffic grew 7.8% while trailer traffic registered a solid 32.6% rise in volumes in the reported week. Containers dominate KSU’s intermodal traffic mix, accounting for ~98% of the traffic. 

Container volumes totaled ~21,400 units compared with nearly 20,000 units in the corresponding week in 2016. Trailer volumes rose to 370 units from 280 units in the 42nd week of 2016.

Investors looking for exposure to blue-chip stocks included in the S&P 500 could consider investing in the Guggenheim S&P 500 Equal Weight ETF (RSP). All Class I railroads in the US, except Canadian railroads (CP), are included in the portfolio holdings of RSP.

In the next article, we’ll provide a freight volume update on Canadian National Railway (CNI).

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