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CSX: Intermodal Weakness Hurt Rail Traffic Volume in Week 22

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CSX’s rail traffic declined

CSX’s (CSX) overall rail traffic fell 5.8% YoY (year-over-year) to 113,033 railcars in Week 22 from 119,990 cars in Week 22 of the previous year. Six out of seven Class I railroad companies recorded volume declines. Union Pacific (UNP) recorded the highest fall of 9%, while Canadian Pacific Railway (CP) was the only gainer with volume growth of 25.1%.

A drastic fall in intermodal units mainly hurt CSX’s overall rail traffic performance in Week 22. The company’s intermodal traffic fell 12.8% YoY to 45,739 containers and trailers from 52,453 units in the same week the previous year. CSX’s container volumes fell 12.4% YoY to 44,284 units from 50,571 units. The company’s trailer traffic fell 22.7% YoY to 1,455 units from 1,882 units.

Six of the seven Class I railroad companies recorded intermodal volume declines during Week 22. CSX registered the highest fall, while Canadian Pacific Railway was the only gainer with volume growth of 32.2%.

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Carload traffic fell

CSX’s carload traffic fell 0.4% YoY to 67,294 railcars, excluding intermodal units, from 67,537 railcars in Week 22 of 2018. CSX’s carload traffic, excluding coal and coke, increased 0.8% YoY to 51,928 railcars from 51,509 railcars in the same week the previous year. However, the company’s coal and coke traffic fell 4.1% YoY to 15,366 units from 16,028 units.

CSX recorded a carload traffic decline across the chemicals, metals, coal, and iron and steel scrap commodity groups. Commodities including food, forest products, petroleum, nonmetallic minerals, metallic ores, and motor vehicles and parts registered YoY traffic growth.

Six of the seven Class I railroad companies recorded carload traffic declines during the week. Union Pacific’s carload traffic decline of 10.6% was the highest, followed by Norfolk Southern’s (NSC) volume decline of 4.9%. Canadian Pacific Railway was the only gainer with carload volume growth of 21.5%.

CSX stock has returned 25.7% YTD (year-to-date). The stock outperformed the returns of the SPDR S&P Transportation ETF (XTN), which invests in US transportation companies. XTN has allocated 42.8% of its funds to the freight and logistics services industry. XTN has gained 10.2% YTD.

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