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Strong Carload Drove Norfolk Southern’s Rail Traffic Higher

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Norfolk Southern’s rail traffic improved

Norfolk Southern’s (NSC) rail traffic grew 0.6% YoY (year-over-year) in Week 20. The company hauled 156,347 railcars during the week—compared to 155,369 wagons in Week 20 of 2018.

Four of the seven Class I railroad companies registered volume growth during the week, while three companies recorded volume declines. Canadian Pacific Railway (CP) registered the highest growth of 2.8%, while Union Pacific (UNP) reported the biggest volume decline of 4.2%.

Higher carload volumes mainly drove the YoY rail traffic increase. The company’s carload traffic grew 3.8% YoY to 72,685 railcars from 70,012 railcars. Norfolk Southern’s carload volumes, excluding coal and coke, increased 1.6% YoY to 49,430 units. The company’s coal and coke traffic grew 8.9% YoY to 23,255 units from 21,362 units.

Norfolk Southern recorded carload traffic growth across chemicals, grain, grain mill, metallic ores, nonmetallic minerals, and motor vehicles and equipment products. The company registered a volume decline across food, iron, steel, metals, primary forest, and petroleum products.

During Week 20, except for Union Pacific, six of the seven Class I railroad companies recorded carload traffic growth. Kansas City Southern (KSU) reported the highest gain of 5.8%, while Union Pacific registered a volume decline of 2.5%.

Intermodal units

Norfolk Southern’s intermodal volumes fell 2% YoY to 83,662 containers and trailers—compared to 85,357 units in Week 20 of 2018. The company’s container volumes fell 1.5% YoY to 76,815 units from 77,954 units. Norfolk Southern’s trailer volumes fell 7.5% YoY to 6,847 units from 7,403 units.

During Week 20, except for Canadian Pacific, all of the Class I railroad companies recorded lower intermodal unit volumes. Canadian Pacific’s intermodal traffic grew 3.3%. CSX (CSX) saw the highest volume decline of 11%.

Norfolk Southern stock has returned 35.8% year-to-date and outperformed the gains of the SPDR S&P Transportation ETF (XTN), which has risen 11.7%. XTN invests in US transportation stocks. XTN has allocated 42.8% of its fund to the ground freight and logistics industry.

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