#efta01415976
LightNews LightNews
epsteinweb.bsky.social
EFTA01415976.jpg
#epsteinweb #efta01415976
https://epsteinweb.org
EFTA01415820 | EFTA01415976 31 October 2017 Railroads Canadian Rails Figure 112: Petroleum & Chemicals as a % of Total Revenues We see long-term tailwinds for chemical carload growth due to increased demand for polyethelene exports, though we do see competition from other rails such as UNP in this arena. All Other 81% Petroleum & chems 19% Refined petroleum products 33% Crude & condensate 17% Chems & plastics 46% Sulfur 4% Source: Deutsche Bank, Company filings Grain & Fertilizers - accounted for 19% of CNI's revenue in 2016. Grain and fertilizers revenue has grown at a 5.2% CAGR since 2006 due almost entirely to a 5.1% yield CAGR as volumes have essentially remained flat. We note that agriculture related carload growth can be somewhat volatile, however, and is often dependent on the quality of crop production. For example, following a record crop year in 2013/14 CNI's grain & fertilizer carloads were up nearly 12% in 2014. To this point, comps for the next few quarters will be challenging for CNI as we lap the record crop year in 2016/17. We note that roughly 68% of CNI's grain carloads originate in Canada, and the company moves roughly 52% of Canada's total grain crop. Over the past few years, CNI has invested in new locomotives and longer-siding in order to accommodate longer trains which has helped the company win new business. To that point, CNI's grain revenue ton miles (RTM's) increased 3% yoy in 2016 while CP's declined 3% yoy. While this trend continued into 2017, we have begun to see some weakness in CNI's grain volumes as RTM's have declined yoy in five consecutive weeks. Figure 113: Grain & Fertilizers as a % of Total Revenues We see near-term headwinds for Grain volumes amidst tough comps, a weaker crop year, and our expectation for market share losses due to a natural rebalancing of grain shipments back to CP's network. EFTA01415976
February 20, 2026 at 4:42 AM