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Kansas City Southern’s Rail Traffic Fell on Intermodal Weakness

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Kansas City Southern

Kansas City Southern (KSU) reported a 3.1% fall in its overall rail traffic in Week 22. The company hauled 42,456 units during the week compared to 43,821 units in Week 22 of 2018.

Six out of seven Class I railroad companies recorded volume declines during the week. Union Pacific (UNP) registered the highest fall of 9%. Canadian Pacific Railway (CP) was the only volume gainer. The company recorded a rise of 25.1% YoY (year-over-year).

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A drastic fall in intermodal units mainly hurt Kansas City Southern’s overall rail traffic performance in Week 22. The company’s intermodal volumes fell 6.3% YoY to 18,388 units from 19,617 units in Week 22 of 2018. Six of seven Class I railroad companies recorded intermodal volume declines during Week 22. CSX (CSX) registered the highest fall of 12.8%. Canadian Pacific Railway was the only volume gainer. The company recorded a rise of 32.2% YoY.

Carload traffic fell

Kansas City Southern’s carload traffic fell 0.6% YoY to 24,068 railcars from 24,204 railcars. Six of the seven Class I railroad companies recorded carload traffic declines in Week 22. Union Pacific registered the highest drop of 10.6%. Canadian Pacific Railway was the only railroad company that recorded carload traffic growth of 21.5%.

Kansas City Southern’s carload traffic for commodities, excluding coal and coke, grew 1.6% YoY to 21,092 units from 20,759 units. However, the company’s coal and coke traffic fell 13.6% YoY to 2,976 railcars from 3,445 railcars. The company recorded volume declines across coal, coke, grain, metallic ores, and metal commodities. Kansas City Southern’s petroleum, chemicals, motor vehicle and equipment, and primary forest products volumes grew YoY.

Kansas City Southern stock has returned 23.1% YTD (year-to-date). The stock has 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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