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Which US Railroad Had the Highest Volume Gains in Q1 2018?

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Railroads’ freight volumes

The AAR (Association of American Railroads) classifies all the commodities hauled by railroads into ten carload commodity groups. The intermodal volumes represented in containers and trailers are reported separately. All US Class I railroads (IYT) report carload data and intermodal traffic data separately. The change in commodity groups’ volumes will give you more insight into the railroads’ volume mix.

The above graph shows that Western US major railroad BNSF (Burlington Northern Santa Fe) Railway recorded the highest growth of 5.1% YoY (year-over-year) in the first quarter. Notice the mid-single-digit rate of BNSF’s freight volume rise. It shows that major US railroads’ overall freight volume growth hasn’t done well in 2018. Eastern US rail carrier CSX (CSX) and the United States’ largest short-line carrier Genesee & Wyoming (GWR) have posted negative changes in their first-quarter freight volumes.

Western US railroad volumes

BNSF’s volumes of industrial products, consumer products, and agricultural products rose in the first quarter, compensating for the fall in coal volumes. The company witnessed strong growth in shipments of grain, ethanol, steel, chemicals, plastics, and fractionating sand. Union Pacific’s (UNP) overall volumes grew 2% YoY in the first quarter. Its agriculture products volumes declined 4%, and its shipments of energy, industrial, and premium segment commodities rose 6%, 2%, and 2%, respectively.

Eastern US railroads

Norfolk Southern’s (NSC) overall volumes rose 3% YoY in the first quarter. Lower volumes of coal, paper products, automotive, metal and construction, agriculture, and consumer products were offset by higher chemical and intermodal volumes. CSX’s overall shipments, including intermodal, declined 4% YoY. Except for a 6% rise in automotive volumes, all other carload commodity groups such as chemicals, agricultural products, minerals, metals and equipment, and fertilizers reported reduced volumes year-over-year in the first quarter.

KSU’s and GWR’s volume changes

Kansas City Southern’s (KSU) total rail traffic expanded 1% YoY in the first quarter. Chemical and petroleum carloads grew 2%, whereas industrial and consumer product carloads rose 4%. Automotive carloads rose 6%. Shipment growth in these commodity groups was offset by lower volumes of energy (20%) and agriculture and mineral (5%) commodity groups. Genesee & Wyoming’s (GWR) volumes declined 1.1% in the first quarter.

Canadian railroads

Canadian Pacific Railway (CP) reported a 4% YoY growth in first-quarter freight volumes. The decline in grain, automotive, metals, minerals, and consumer product shipments was offset by higher volumes of coal, potash, fertilizers and sulfur, forest products and energy, and chemicals and plastic.

Canadian National Railway’s (CNI) total shipments expanded 3% in the first quarter. Except for coal, metals and minerals, and intermodal shipments, all other commodity groups’ volumes declined in the first quarter. The prominent commodity groups with lower volumes were forest products, petroleum and chemicals, and grain and fertilizers.

Next, let’s look at changes in major railroads’ first-quarter operating margins.

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