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Weak Intermodal Hurt Canadian National’s Rail Traffic

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Rail traffic fell

Canadian National Railway’s (CNI) total rail traffic fell 0.5% YoY (year-over-year) to 117,111 railcars from 117,742 railcars. Among the seven Class I railroad companies, six registered YoY declines in their freight rail traffic in Week 24. Union Pacific (UNP) recorded the highest fall of 6%. Canadian Pacific Railway (CP) was the only volume gainer with 0.8% growth.

Weak intermodal volumes hurt Canadian National Railway’s overall rail traffic in Week 24. The company’s intermodal volume fell 1.2% YoY to 50,878 units from 51,486 units in Week 24 of 2018. Among the seven Class I railroad companies, six recorded intermodal volume declines during Week 24. CSX (CSX) registered the highest fall of 11.5%. Canadian Pacific Railway was the only company to report an intermodal volume gain of 5.8%.

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Carload traffic

Canadian National Railway’s carload traffic remained almost flat YoY. The company hauled 66,233 railcars in the week compared to 66,256 units in Week 24 of 2018. The company’s carload traffic, excluding coal and coke, rose 0.6% YoY to 59,647 railcars from 59,269 railcars. However, Canadian National Railway’s coal and coke traffic fell 5.7% YoY to 6,586 units from 6,987 units in Week 24.

The company recorded a volume decline across every commodity group, excluding chemicals, petroleum, and iron and steel scrap products.

Four of the seven Class I railroad companies recorded carload traffic declines in the week. Union Pacific recorded the highest carload traffic decline of 5.1%. Kansas City Southern (KSU) and CSX were the only two railroad companies that registered carload volume growth of 2.4% and 3.3%, respectively.

Canadian National Railway stock has returned 20.5% year-to-date. The stock has outperformed the Industrial Select Sector SPDR ETF (XLI). XLI has allocated 17.7% of its holdings to the freight and logistics services industry. So far, XLI has gained 17.6% in 2019.

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