Nobody move a muscle! Without knowing how strong or how fragile this brand-new uptick in North American industrial activity truly is, perhaps it's best to not so much as sneeze.
Canadian National Railway
Hauling 16% more carloads of freight in the first quarter than it did a year earlier, Canadian National has surged back toward normalized freight volumes faster than any of its competitors. All major North American railroads have shifted from declining volumes to expansion on a year-over-year basis, but only Canadian National has seen those levels already approaching the more relevant pre-collapse levels from two years ago. Year-to-date, Canadian National's freight traffic has logged a volume only 3.6% lower than the comparable 2008 period.
By contrast, major competitors CSX
Although higher than the hauler's remarkable 2009 full-year operating ratio of 67.3%, the first-quarter mark of 69.3% remains a noteworthy achievement in the context of rising fuel prices and expanding freight volumes. Meanwhile, we find Canadian National reporting a 22% increase in carloads of coal hauled in the first quarter, in contrast to CSX's recent report of a 19% reduction in coal shipments to domestic buyers.
As coal miners Arch Coal
Only time will tell whether this thawing of the North American industrial sectors has the momentum of a slow-moving freight train behind it. For investors seeking a comfortable ride, I continue to view Canadian National Railway as the best locomotive on rails.