Union Pacific’s Rail Traffic Fell on Intermodal Weakness

UNP’s rail traffic fell

Union Pacific’s (UNP) rail traffic fell 2.5% YoY (year-over-year) in Week 19, which ended on May 11. The company hauled 169,368 railcars during the week compared to 173,655 railcars in Week 19 of 2018.

Union Pacific’s Rail Traffic Fell on Intermodal Weakness

During the week, five of the seven Class I railroad companies registered volume declines, while two recorded increases. CSX (CSX) registered the biggest decline of 4.3%, while Canadian National Railway (CNI) recorded the highest gain of 1.3%.

Union Pacific’s dismal rail traffic performance was mainly the result of a 4.5% fall in its intermodal volumes. During the week, the company moved 76,754 containers and trailers compared to 80,359 units in Week 19 of 2018. The railroad company’s container volumes fell 4% YoY to 73,991 units from 77,112 units, while its trailer volumes plunged 14.9% YoY to 2,763 units from 3,247 units.

During Week 19, all seven Class I railroad companies recorded lower intermodal unit volumes, with BNSF Railway seeing the highest volume decline of 7.1%. CNI registered the smallest fall of 0.3%.

Carload traffic fell

Union Pacific’s carload traffic inched down 0.7% YoY to 92,614 railcars from 93,296 railcars in Week 19 of 2018. Its carload volumes excluding coal and coke plunged 1.8% YoY to 73,588 units, while its coal and coke traffic grew 3.8% YoY to 19,026 units from 18,338 units.

Union Pacific registered a double-digit carload traffic decline across the grain, farm, metallic ore, coal, and crushed stone, sand, and gravel commodity groups. On the other hand, it recorded double-digit volume growth across nonmetallic minerals, forest, chemicals, and petroleum products.

Three of the seven Class I railroad companies registered carload traffic growth during the week, while four recorded declines. CNI reported the highest gain of 2.5%, while CSX registered the steepest drop of 2.2%. Canadian Pacific Railway (CP) and Kansas City Southern (KSU) were the other two railroad companies that recorded carload traffic growth of 1.8% and 0.2%, respectively.

Union Pacific stock has returned 27% YTD (year-to-date), outperforming the 15% gain of the SPDR S&P Transportation ETF (XTN). The ETF invests in the US transportation stocks and has allocated 42.8% of its funds to the ground freight and logistics industry.