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.
More than 1,400 Motley Fool CAPS members, including 582 All-Stars, expect five-star pick CNI to outperform the S&P 500. In all, the CAPS community has shared its collective insight on 34 "road and rail" companies. Join the free CAPS community today and share your views on how the rail industry will fare throughout these persistent economic headwinds.
Fool contributor Christopher Barker has never hopped a freight train, but he thinks it would be a fun place to learn the harmonica. He can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He also tweets. Chris owns shares of Arch Coal. USG is a Motley Fool Inside Value selection. Canadian National Railway is a Motley Fool Stock Advisor pick. Try any of our Foolish newsletters today, free for 30 days. The Fool's disclosure policy never plays on the tracks.