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

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.

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.