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Weak Intermodal Volumes Hurt CSX’s Rail Traffic in Week 21

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CSX’s rail traffic fell

CSX’s (CSX) overall rail traffic fell 6.2% YoY (year-over-year) to 121,772 railcars in Week 21 from 129,865 railcars in Week 21 of the previous year. Six out of seven Class I railroad companies recorded volume declines.

BNSF Railway recorded the highest fall of 7%, while Canadian Pacific Railway (CP) was the only gainer with volume growth of 2.3%.

A drastic fall in intermodal volumes mainly hurt CSX’s overall rail traffic performance in Week 21. The company’s intermodal traffic fell 13% YoY to 50,274 containers and trailers from 57,770 units in the same week of the previous year. CSX’s container volumes fell 13% YoY to 48,392 units from 55,615 units. Its trailer traffic fell 12.7% YoY to 1,882 units from 2,155 units.

Five out of seven Class I railroad companies recorded intermodal volume declines during Week 21. CSX registered the highest fall, while Kansas City Southern (KSU) and CP reported volume increases of 2.4% and 1.8%, respectively.

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Carload traffic fell

CSX’s carload traffic also fell 0.8% YoY to 71,498 railcars excluding intermodal units from 72,095 railcars in Week 21 of 2018. CSX’s carload traffic excluding coal and coke increased 2.6% YoY to 54,807 railcars from 53,444 railcars in the same week of the previous year. However, the company’s coal and coke traffic plunged 10.5% YoY to 16,691 units from 18,651 units.

CSX recorded a double-digit carload traffic decline across the metals, farm, metallic ore, coal, and iron and steel scrap commodity groups. Commodities including grain mill products, forest products, crushed stone, sand, and gravel, and petroleum and petroleum products registered double-digit YoY traffic growth.

Five out of seven Class I railroad companies recorded carload traffic declines during the week. Norfolk Southern’s (NSC) carload traffic decline of 7.9% was the highest. The two carload volume gainers were CP and Canadian National Railway (CNI), which were up 2.6% and 0.2%, respectively.

CSX stock has returned ~19% YTD (year-to-date), outperforming the gains of the Industrial Select Sector SPDR ETF (XLI), which has allocated 17.7% of its holdings to the freight and logistics services industry. The ETF has provided a YTD return of 13%.

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