uploads///GWR Euro

Why Genesee & Wyoming’s UK-European Rail Traffic Slumped in July

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Aug. 23 2018, Updated 7:31 a.m. ET

GWR’s European volumes in July

Genesee & Wyoming’s (GWR) UK-European total railcar volumes declined 1% YoY (year-over-year) in July. Those railroad operations saw ~79,700 railcars in the region in July compared to ~80,500 units in July 2017.

GWR’s traffic excluding the coal and coke commodity group made up 98.7% of its UK-European operations traffic in July. In July 2017, railcars sans the coal and coke commodity group made up 98.9% of UK-European traffic. Railcars declined 1.2% YoY to ~78,700 units in July from ~79,600 units in July 2017. Coal and coke railcars increased 15.2% YoY to ~1,100 units in July from 925 units in July 2017.

GWR divested its ERS operations in the UK-European region in June 2018. In July 2017, these operations contributed ~10,450 units. So on a reported basis, the company’s volumes slumped 12.4% YoY in July.

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Commodity-wise volume changes

The commodity group that posted volume growth in July was agricultural products. Intermodal traffic declined in the United Kingdom due to operational issues at a port in that region. For GWR, the term carload represents physical railcars and estimated railcar equivalents of commodities as well as intermodal units.

Genesee & Wyoming is a provider of the largest rail maritime intermodal services in the United Kingdom. It’s also the second-largest freight rail service provider and the regional services provider in Continental Europe.

ETF investment

Investors who are optimistic about transportation and logistics stocks may consider investing in the First Trust Industrials/Producer Durables AlphaDEX ETF (FXR). It has a 2.01% weight in Norfolk Southern (NSC) and a 1.93% weight in Kansas City Southern (KSU). Trucking companies Ryder System (R) and Expeditors International of Washington (EXPD) make up 1.91% and 1.76% of FXR’s holdings, respectively.

In the next section, we’ll look at GWR’s Australian region’s July traffic.

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