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Analyzing Genesee & Wyoming’s North American Traffic in May

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GWR’s North American carloads

North American operations form a sizable share of Genesee & Wyoming’s (GWR) overall revenues. The company earns between 60% and 65% of operating revenues from North American operations. In May 2018, the company’s North American same railroad volumes saw a double-digit jump by 13.6% YoY (year-over-year). The contribution of new railroads to total volumes in May was 725 carloads.

On a reported basis, GWR’s North American shipments zoomed 14.2% YoY in May. On a positive note, the company’s same railroad operations exhibited gains in the last three months. Carloads other than coal and coke were up 8.9% YoY in May to ~130,300 units compared with ~119,700. Coal and coke carloads were up by a whopping 59% YoY in the reported month. GWR hauled ~20,100 coal and coke carloads in May compared to 12,600.

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Quarter-to-May North American traffic

North American traffic rose 9.3% YoY quarter-to-May on a same-railroad basis. The company moved ~285,800 carloads in the first two months of the second quarter of 2018 compared with ~261,400. The most noticeable aspect of the quarter-to-May North American volumes was a positive change in all the carload commodity groups reported by GWR.

Changes in North American commodity groups

In May 2018, all the carload commodity groups recorded a volume rise. However, the following commodities saw the most substantial YoY growth:

  • intermodal
  • chemicals and plastics
  • lumber and forest products
  • metals
  • minerals and stones
  • pulp and paper
  • petroleum products

ETF investment

Lower taxes and the tax deduction from the capital expenditure clause have made investments in the transportation and logistics sector more attractive. Investors who are optimistic about this sector can consider the SPDR S&P Transportation ETF (XTN). This ETF invests 43% of its holdings in major US airline (DAL) (JBLU) companies and 13% in key US railroad (NSC) companies.

In the next part of this series, we’ll look at GWR’s United Kingdom and European rail traffic trends in May.

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