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Downtrend in US Rail Traffic Continued in Week 24

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Rail traffic fell

The downtrend in the US rail traffic volume continued for the 21st consecutive week. On June 19, the Association of American Railroads reported that US companies’ air traffic fell 5.4% in Week 24, which ended on June 15. The companies hauled 527,989 units in Week 24—compared to the 558,128 units in Week 24 of 2018.

US railroads registered a volume decline across the intermodal and carload units. The intermodal traffic fell 6.2% YoY (year-over-year) to 270,604 containers and trailers.

US railroad companies’ carload traffic fell 4.6% YoY to 257,385 railcars in Week 24. The companies recorded significant traffic declines across non-metallic minerals, forest, and coal. They recorded volume gains across petroleum and petroleum products and chemicals.

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Canadian and Mexican railcar traffic

Canadian railroad companies’ overall traffic rose 0.8% YoY to 155,582 units. The companies’ carload traffic grew 0.6% YoY to 85,070 railcars in Week 24, while the intermodal traffic rose 1% YoY to 70,512 containers and trailers.

Mexican railroad companies’ traffic fell 1.3% YoY in Week 24 to 39,355 carloads and intermodal units. The carload volume fell 4.7% YoY to 21,105 railcars. However, the intermodal traffic increased 2.9% YoY to 18,250 wagons.

Companies’ performance

Except for Canadian Pacific Railway (CP), six of the seven Class I railroad companies registered YoY declines in their rail traffic volumes in Week 24. Canadian Pacific recorded rail traffic growth of 0.8%. Union Pacific (UNP) saw the biggest drop of 6%. Norfolk Southern (NSC), BNSF Railway, CSX (CSX), Kansas City Southern (KSU), and Canadian National Railway (CNI) reported traffic declines of 5.3%, 3.7%, 3.4%, 1.6%, and 0.5%, respectively.

The iShares Transportation Average ETF (IYT) has allocated 52.5% of its funds to ground freight and logistics stocks. IYT has risen 12.9% year-to-date. However, IYT has underperformed the Dow Jones Industrial Index, which has returned 14.5%.

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