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Downtrend in US Rail Traffic Persisted for 19th Consecutive Week

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US rail traffic fell

Overall, US railroad companies’ traffic fell for the 19th consecutive week in Week 22, which ended on June 1. On June 5, the Association of American Railroads reported that these companies’ rail traffic fell 6.1% in Week 22. US railroad companies hauled 478,679 units in the week compared to the 509,775 units in Week 22 of 2018.

Volume declines across the intermodal and carload units hurt US railroad companies’ overall rail traffic performance in Week 22. Their intermodal traffic fell 6.4% YoY (year-over-year) to 241,167 containers and trailers.

US railroad companies’ carload traffic fell 5.8% YoY to 237,512 railcars in Week 22. These companies registered significant traffic declines across coal, metallic ore, metals, and non-metallic minerals. They recorded volume gains across chemicals, petroleum, and petroleum products.

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Canadian and Mexican railcar traffic

Canadian railroad companies’ overall traffic increased 2.9% YoY to 149,978 units. These companies’ carload traffic grew 4% YoY to 83,265 railcars in Week 22, while their intermodal traffic rose 1.5% YoY to 66,713 containers and trailers.

Mexican railroad companies’ traffic rose 0.5% YoY in Week 22 to 38,600 carloads and intermodal units. Their intermodal traffic grew 1.4% YoY to 17,430 units. However, their carload traffic fell 0.3% YoY to 21,170 railcars.

Company performances

Six of the seven Class I railroad companies saw YoY declines in their rail traffic volumes in Week 22. Canadian Pacific Railway (CP) was the only volume gainer. The company recorded rail traffic growth of 25.1%. Union Pacific (UNP) saw the biggest drop of 9%. Norfolk Southern (NSC), Canadian National Railway (CNI), CSX (CSX), BNSF Railway, and Kansas City Southern (KSU) reported traffic declines of 6.6%, 5.9%, 5.8%, 4.8%, and 3.1%, respectively.

The iShares Transportation Average ETF (IYT) has allocated 52.5% of its funds to ground freight and logistics stocks. Year-to-date, IYT has gained 10.9%. IYT has underperformed the Dow Jones Industrial Average, which has returned 11.4%.

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