Boston, MA 08/29/2014 (wallstreetpr) – Canadian National Railway (USA) (NYSE:CNI) and the other companies in the same industry are set to benefit from the increased traffic at Canadian ports. There is a probability of a strike by U.S. West Coast longshoremen. As a result, the traffic at Prince Rupert port rose to 49% in the month of July as compared to a year ago. At the same time, the traffic volume of its major U.S. rival Seattle has dropped by 19%.
The issue
Canadian ports and Canadian National Railway (USA) (NYSE:CNI) are getting benefits over the U.S. rivals at a crucial time when the growth is returning back in the economy. The industry is witnessing higher container volumes from East Asia. The higher volumes are not providing any benefits to U.S. West Coast Port as they are facing labor disputes transferring the entire set of customers to Prince Rupert. The containers transportation is getting the shorter sailing times from China with well-designed infrastructure. The issue is becoming more of an opportunity for the Canadian ports. If the customers like the services and processing times, they are set to make use of Canadian ports in the future.
The demand
Container traffic is on the rise as the volume at biggest Canadian ports, and U.S. port rose 7.2% in May as compared to year-ago. The traffic volume growth in April was at 5.9%. The higher container volume suggests that the U.S. economy is rebounding. Prince Rupert is clearly benefiting from the high demand as the waiting time of the containers to be loaded into trains has rose to ten days as compared to two days in the normal period.
The opportunity
Canadian National Railway (USA) (NYSE:CNI) is one such company which will benefit from the added traffic. Canadian has got exclusive connection with port Prince Rupert and its lines. The port will be the number one player to act as the quickest route linking the U.S. Midwest and East Asia. Intermodal freight uses different modes of transportation, and Canadian intermodal segment is doing well. The revenues from the segment rose 17% to $659 million in the second quarter.
