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BNSF Railway Has Worst Rail Traffic Performance among Peers

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Rail traffic decline

Berkshire Hathaway-owned BNSF Railway’s (BRK.B) rail traffic volume declined 2.2% YoY to 214,630 units mainly due to a decrease in intermodal and carload traffic. BNSF’s rail traffic decline in week 48 was in contrast to the 0.4% gain registered by US railroad companies.

The railroad company’s traffic volume loss was the highest among all class I railroad companies (IYT) during the week. Apart from BNSF, Kansas City Southern (KSU) was the only other company to report a traffic volume loss in week 48. However, in the first 48 weeks, BNSF’s overall rail traffic volumes grew 4.1% YoY. The railroad company’s traffic gains were higher than the 3.6% YoY growth reported by US railroad companies during the period.

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Carload traffic decreased

The company reported a 0.2% YoY fall in its week 48 carload traffic. The railroad company moved 105,736 railcars except for intermodal units in the week compared to 105,986 units in week 48 of 2017.

BNSF’s carload commodity groups excluding coal and coke made up 62% of its total carload traffic in week 48. Commodity groups excluding coal and coke reported 0.8% YoY carload growth to 65,925 railcars from 65,431 railcars in week 48 of 2017. Coal and coke traffic, which made up 38% of its total carloads, declined 1.8% YoY in the week to 39,811 units from 40,555 units.

Commodity groups reporting notable volume growth in week 48 include chemicals, food, metallic ores, metals, pulp & paper, petroleum, iron, steel & scrap, and non-metallic minerals. Commodity groups recording a YoY decline in week 48 volumes included grain, sand & gravel, farm products, and forest products.

BNSF’s intermodal volumes

BNSF Railway’s intermodal volumes fell 4.1% YoY in week 48 to 108,894 containers and trailers in the week from 113,577 units. The YoY decline in intermodal units was the highest among Class I railroad companies. The other two companies that witnessed a fall in intermodal volumes were two big Canadian railroad companies: Canadian Pacific Railway (CP) and Canadian National Railway (CNI). The two companies posted YoY declines of 2.8% and 1.7% in their respective intermodal traffic. BNSF’s prime competitor, Union Pacific (UNP), recorded the highest YoY gain of 11.4%.

BSNF’s container volumes slumped 4.6% YoY to 93,310 units in week 48 from 97,778 units in the same week of 2017. Trailer traffic contracted 1.4% YoY to 15,584 units compared to 15,799 units.

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