Norfolk Southern (NSC) and CSX (CSX) run a virtual duopoly in the Eastern United States. In the week ended March 11, 2017, NSC’s overall railcar volumes rose 3%. The company saw volumes of ~69,000 railcars in the tenth week of 2017. However, there was only a marginal rise of 0.7% in carloads other than coal and coke in the tenth week of 2017. Investors should note that for the first ten weeks, NSC has fallen behind arch rival CSX in terms of year-over-year growth in carloads.
Since the beginning of 2017, higher coal volumes have boosted NSC’s overall carloads. NSC’s coal (ARLP) carloads rose 12.3% YoY in the week ended March 11, 2017. CSX, however, reported a 3.4% slump in coal and coke carloads during the same week. If you want to compare this week’s freight volume data with the previous week’s, check out Market Realist’s Week Ended March 4: Was US Rail Traffic on the Right Track?
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Coal (CNX) made up ~15% of the company’s 2016 revenue, falling from 23% in 2009. However, recent trends in coal prices have kindled coal producers’ hopes. Norfolk Southern expects to handle 17 million–19 million tons of utility coal per quarter in 2017.
NSC also anticipates handling 3.5 million–4.5 million tons of export coal in 2017 on a quarterly basis. The tightening of the international coal supply and better seaborne pricing will most likely boost export coal tonnage over the next four quarters.
In the week ended March 11, 2017, advancing commodity groups were as follows:
The major falling commodities in the seventh week were:
Continue to the next part of this series for a look at NSC’s intermodal traffic for the week ended March 11, 2017.