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Unfolding Genesee & Wyoming’s Europe Traffic Slump in August

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GWR’s Europe rail traffic in August

In August, Genesee & Wyoming’s (GWR) rail traffic in Europe reported a 1.8% YoY (year-over-year) decline. GWR’s same-railroad carloads in the region totaled ~84,200 railcars in the last month compared to ~85,800 units in the corresponding period last year.

Traffic of commodity groups excluding coal and coke made up 98.0% of GWR’s Europe carloads in August. These commodity groups reported a 2.4% YoY fall in carloads to 82,500 units in August from 84,600 units in August 2017. Coal and coke railcars, however, jumped a robust 43.2% YoY to ~1,700 units in August compared to ~1,200 units in the same month last year.

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In June, Genesee & Wyoming sold off its ERS business, which was part of its European region. In August 2017, these operations contributed ~10,700 units. On a reported basis, GWR’s carloads slumped 12.7% YoY in August. In the third quarter through August, Europe’s same-railroad carloads declined 1.4% YoY to 166,300 railcars from ~164,000 units in the comparable period last year.

Changes in carload commodity groups

Except for coal and coke, none of the carload commodity groups reported volume growth in August. Carloads of agriculture products, intermodal, and mineral and stones declined in the last month YoY. 

The fall in intermodal traffic was due to declining volumes 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. The company is the second-largest freight rail service provider as well as a provider of regional services in Continental Europe.

ETF investment

If you’re bullish on transportation sector stocks, you might consider investing in the First Trust Industrials/Producer Durables AlphaDEX Fund (FXR). This ETF holds 1.88% of its portfolio in Genesee & Wyoming.

Among the major railroads, this ETF has ~2.1% weight in Norfolk Southern (NSC) and 1.88% weight in Kansas City Southern (KSU). XTN has weights of 1.77% and 1.72%, respectively, in Ryder System (R) and Expeditors International of Washington (EXPD).

In the next part, we’ll take a look at GWR’s Australian August traffic.

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