How CSX’s Carloads Fared against Norfolk Southern in Week 12
In the week ended March 25, 2017, CSX’s (CSX) overall railcar volumes rose to 4.4% YoY (year-over-year). That week, CSX hauled more than 72,000 railcars, compared to more than 69,000 in the corresponding week of 2016.
CSX’s carloads, excluding coal and coke, rose marginally to 2.7% in the same week. Rival Norfolk Southern’s (NSC) carloads rose 9.4% that week. CSX’s rise by percentage was half of NSC’s.
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CSX’s coal and coke railcar volumes surged to 10.1% in the week ended March 25, 2017. However, NSC posted a remarkable rise of 21.0% in the same category. Note that coal made up 16.5% of CSX’s volumes in 2016, compared to 19.5% a year before.
Why is coal vital for CSX?
According to the EIA (U.S. Energy Information Administration), in 2016, coal production fell 18.0%, or 158.0 MMst (million short tons) to 739.0 MMst. That figure represents the lowest level of coal produced since 1978.
In 2017, growth in coal-fired electricity generation is expected to result in a 7.0% rise in total US coal production, or an additional 51.0 MMst. The majority of the rise will likely come from the Western and interior regions of the United States.
Eastern railroads have cited electricity generation plants’ overall shift from coal to natural gas (UNG) as one of the main reasons for the fall in utility coal transportation. The shift has affected all major US coal producers, including Alliance Resource Partners (ARLP), Consol Energy (CNX), and Peabody Energy (BTU), which declared bankruptcy. However, recent coal price trends backed by increased coal transportation could suggest a revival.
Bull and bear commodity groups
The commodity groups that posted significant rises in the week ended March 25, 2017, were as follows:
- primary metal products
- non-metallic minerals
- iron and steel scrap
- stone, clay, and glass products
- waste and nonferrous scrap
The prominent commodity groups that fell during the week were as follows:
- primary forest products
- metallic ores
- pulp and paper products
We’ll look at CSX’s intermodal traffic in the next part of this series.