Genesee & Wyoming
On August 13, Genesee & Wyoming (GWR), the largest short line rail operator in the United States, released its rail freight data for July. Its operations span the United States, Canada, the United Kingdom, Europe, and parts of Australia. In the five years ended 2017, GWR spent ~$2.1 billion on acquisitions. Since its inception, the company has grown through various acquisitions. Although the railroad is not a Class I railroad, Wall Street often compares it to US Class I railroads (XTN).
GWR’s volumes compared to its peers
Genesee & Wyoming reports freight volumes on a monthly basis, unlike the weekly reporting of Class I railroads. The above graph shows that in the first half of 2018, Berkshire Hathaway–owned BNSF Railway’s (BRK.B) 5% YoY (year-over-year) volume gain topped its peers. It was followed by Canadian National Railway (CNI) and Norfolk Southern (NSC), which posted 4.3% YoY volume gains in the first half of 2018.
Canadian Pacific Railway (CP) ranked third with a YoY shipments gain of 3.3% in the first half of this year. Union Pacific’s (UNP) YoY volume growth was 3%, which was slightly higher than the 2.7% gains reported by US railroads in the first half of the year. On a reported basis, GWR’s volumes rose 1.1% YoY in the period. The only railroad with a YoY volume loss was CSX (CSX), which posted a 0.6% loss according to its weekly carload report.
GWR’s same railroad volumes throw a light on its volume gains from the acquisitions in the recent past. In the first quarter, its same railroad volumes were lower YoY. However, the scenario changed in the second quarter. Investors should pay attention to GWR’s same railroad operation growth, which is organic in nature. Reported volumes may not give a clear picture regarding its freight volume trends.
In this series
In this series, we’ll look at Genesee & Wyoming’s monthly rail traffic trend for July. We’ll also dig deeply into its geographic traffic trends last month.