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Union Pacific: Commodities Led the Volume Increase in Week 41

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UNP’s railcar volumes

Omaha-based Union Pacific (UNP) is the largest Class I railroad in the US by revenue. The company’s freight volume growth has been lagging in 2017 compared with rival BNSF Railway (BRK-B). UNP is set to release its 3Q17 earnings on October 26, 2017.

Union Pacific reported a slim increase in its railcar volumes of 94,600 units in the week ended October 14, 2017. The decline in coal volumes weighed on the company’s overall carloads. The company hauled just over 22,000 coal and coke carloads, down 5.7% from 23,500 units in the comparable week of 2016. 

However, the fall in coal was offset by higher volumes of other than coal and coke carloads. These railcar volumes were up 2% to ~72,500 units from 71,000 in the 41st week of 2016.

In the reported week, Union Pacific witnessed lower volume growth compared with the increase in US railroads’ (IYJ) shipments.

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Progressing and regressing commodity groups

The commodity groups that reported year-over-year volume gains were:

  • crushed stone, sand, and gravel
  • nonmetallic minerals
  • lumber and wood products
  • chemicals
  • petroleum products (SLB)

That commodity groups that reported year-over-year declining volumes in the 41st week of 2017 were:

  • grain
  • grain mill products
  • stone, clay, and glass products
  • motor vehicles and parts (TSLA)

UNP’s intermodal traffic

Union Pacific (UNP) posted 3.3% gains in its intermodal traffic in the 41st week of 2017. The company moved ~75,500 containers and trailers compared with 73,000 units in the corresponding week of 2016. 

Containers comprise ~96% of Union Pacific’s intermodal volumes while trailers contribute 4%. Container traffic rose 3.3% to ~72,000 units from ~70,000 in 2016.

UNP hauled ~3,200 trailers in the reported week of 2017, representing a 3.2% rise over the same period last year. The company’s intermodal volume gains were lower compared with its industry peers in week 41.

In the next part, we’ll assess BNSF Railway’s (BRK-B) shipments in week 41.

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