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Week 13: US Freight Rail Volumes on a Growth Trajectory

PART:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Part 4
Week 13: US Freight Rail Volumes on a Growth Trajectory PART 4 OF 15

CSX’s Freight Volumes: How It Stacked Up against Its Peers

CSX freight volumes

In the week ended April 1, 2017, total freight volumes of CSX (CSX) dipped to 4.6% YoY (year-over-year). During the week, CSX freight volumes totaled 69,000 compared to nearly 73,000 railcars in the corresponding week in 2016.

CSX’s freight volumes excluding coal and coke fell 2.1% in the same week. However, there was a rise in rival Norfolk Southern’s (NSC) carloads in the same category.

CSX&#8217;s Freight Volumes: How It Stacked Up against Its Peers

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CSX’s coal and coke railcar volumes fell to 12.9% in the week ended April 1, 2017. However, NSC posted a remarkable rise of 41% in the same category. Coal made up 16.5% of CSX’s volumes in 2016, compared to 19.5% a year ago.

Investors interested in comparing this week’s freight volume data with the previous week’s data can visit Market Realist’s Week 12: North American Freight Rail Traffic on the Fast Track.

Why is coal vital for CSX?

According to the EIA (U.S. Energy Information Administration), coal production fell 18% in 2016, or 158 MMst (million short tons) to 739 MMst. This figure represents the lowest level of coal produced since 1978.

In 2017, growth in coal-fired electricity generation is expected to lead to a 7% rise in total US coal production, or an additional 51 MMst. The majority of the rise could come from the Western US as well as the Midwest.

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) and CONSOL Energy (CNX), as well as 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 April 1, 2017, were as follows:

  • primary metal products
  • food products
  • lumber and wood products
  • non-metallic minerals
  • iron and steel scrap
  • stone, clay, and glass products

The prominent falling commodity groups during the same week were as follows:

  • grain
  • primary forest products
  • metallic ores
  • farm products
  • waste and nonferrous scrap

We’ll look at CSX’s intermodal traffic in the next part of this series.

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