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Genesee & Wyoming’s North American Carloads Fell in January

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North American carloads

In January 2018, Genesee & Wyoming’s (GWR) North American freight traffic contracted 1.7% YoY (year-over-year) on a reported basis. New acquisitions added 501 carloads to the North American carloads. On a same-railroad operations basis, the company moved ~135,700 railcars—2,850 carloads less than 138,550 carloads in January 2017, which represents a 2.1% fall on a YoY basis.

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Coal traffic

Coal (ARLP) and coke commodity group has been dragging down Genesee & Wyoming’s North American freight volumes in recent months. The coal and coke carloads were down 3.8% to less than 21,600 units in January 2018 from 22,400 units in the same month last year. Coal’s share in the total carloads was 15.9%, while the rest of the coal and coke carloads were 84.1% of the total carloads. Although coal and coke’s share dropped in the reported month on a yearly basis, the share of carloads without coal grew marginally.

Apart from coal, the other commodity group that witnessed sharp erosion in carloads was agricultural products. The traffic declined 6.7% or by 1,325 carloads in January 2018. The decrease was mainly due to reduced shipments of soybean meal in Genesee & Wyoming’s Western region and lower shipments of dried distillers’ grains in the Midwest region. Chemicals and plastics carloads contracted 8.2% mainly due to reduced shipments of ethanol in the Midwest region and industrial chemicals in Northeast region.

These commodity groups reported higher shipments in January 2018:

  • lumber and forest products
  • auto and auto parts
  • food and kindred products
  • lumber and forest products
  • pulp and paper

Freight volumes for the following commodity groups went down apart from agricultural and chemicals:

  • metallic ores
  • minerals and stone
  • petroleum products

ETF discussion

Transportation (JBHT) stocks are in focus due to better year-over-year energy-related commodity prices and government policies. Investors who are optimistic about transportation and logistics stocks could consider the iShares US Industrials ETF (IYJ). Major US railroad (UNP) companies account for 6% of IYJ’s portfolio holdings.

Next, we’ll discuss Genesee & Wyoming’s freight traffic in the United Kingdom and Europe.

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