Norfolk Southern: Commodities That Fueled Volumes in Week 15
Norfolk Southern’s carloads
Norfolk Southern (NSC) and CSX (CSX) run a virtual duopoly in the Eastern United States. In the week ended April 15, 2017, NSC’s overall railcar volumes rose 7.8%. It had more than 70,600 railcars that week.
There was a 0.10% or almost negligible fall in carloads other than coal and coke in the week. It’s worth noting that the rise in carloads was on par with the rise reported by US railroads overall. Since the beginning of 2017, higher coal volumes have boosted NSC’s overall carloads. Its coal (ARLP) carloads rose 30.0% YoY in the week ended April 15, 2017.
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If you want to compare this week’s freight volume data with the previous week’s data, check out Market Realist’s Week 14: US Freight Rail Volumes on a Growth Trajectory.
Why coal matters for NSC
Coal (CNX) made up ~15.0% of NSC’s 2016 revenue, falling from 23.0% in 2009. However, recent trends in coal prices have rekindled coal producers’ hopes. Norfolk Southern expects to handle 17.0 million–19.0 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.
Leaders and laggards
In the week ended April 15, 2017, the rising commodity groups were as follows:
- nonmetallic minerals
- motor vehicles and equipment
- metals and products
The major falling commodities in the same week were the following:
- crushed stone, sand, and gravel
- primary forest products
- petroleum products
- pulp, paper, and allied products
- iron and steel scrap
Continue to the next part of this series for a look at NSC’s intermodal traffic for the week ended April 15, 2017.