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Union Pacific: Weak Rail Traffic for the Sixth Straight Week

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Lower rail traffic 

The weakness in Union Pacific’s (UNP) rail traffic continued for the sixth straight week. The company recorded an 8.2% YoY (year-over-year) decline in its rail traffic in week 10 to 155,845 railcars from 169,846 railcars carried in the same week the previous year.

Union Pacific’s dismal rail traffic performance in week 10 was mainly due to a 10.8% fall in its carloads. During the week, the company hauled 83,916 railcars—compared to the 94,110 railcars hauled in week 10 of 2018.

Commodities’ carload volumes, excluding coal and coke, fell 5.7% YoY to 67,842 units from 71,929 units in week 10. Union Pacific’s coal and coke traffic fell 27.5% YoY to 16,074 units from 22,181 units.

The company registered double-digit volume declines across metallic ores, coal, coke, crushed stones, grain mill, forest, pulp, paper, and stone products. However, non-metallic minerals, petroleum, iron, and steel were the few commodity groups that gained.

Among the seven Class I railroad companies (IYT) under review, all of the companies except Kansas City Southern (KSU) recorded a decline in the carload volume in week 10. Kansas City Southern’s carload traffic rose 8.6% during the week.

Intermodal traffic fell

Union Pacific’s intermodal traffic fell 5% YoY to 71,929 containers and trailers from 75,736 units. The company’s container volumes fell 5.1% YoY to 68,695 units from 72,386 units. Union Pacific’s trailer volumes fell 3.5% YoY to 3,234 units from 3,350 units.

During week 10, except Norfolk Southern (NSC), all of the other Class I railroad companies reported a YoY decline in their respective intermodal units. Norfolk Southern’s intermodal traffic rose 1.7% during the week. CSX (CSX) reported the highest decline of 7.8%, while Canadian Pacific (CP) fell 5%.

For the first ten weeks of 2019, Union Pacific reported cumulative volumes of 894,506 carloads—down 3.2% from the same period last year. However, the company’s intermodal units rose 5.1% YoY to 752,816 containers and trailers. Union Pacific’s combined rail traffic in the first ten weeks of 2019 rose 0.5% YoY to ~1.65 million carloads and intermodal units compared to the previous year.

Next, we’ll discuss the Canadian Pacific’s rail traffic.

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