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How Did CSX’s Carloads Perform in the Week Ending July 9?

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CSX’s carloads

CSX (CSX) is a major operator in the Eastern US that competes with Norfolk Southern (NSC). In the week ended July 9, 2016, CSX’s carloads excluding coal and coke fell by 15.2%, which was similar to NSC’s volumes in the same category. Overall, CSX hauled 59,000 plus carloads in the reported week of 2016 against 73,000 carloads in the week ended July 11 last year.

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Why coal carloads matter

CSX’s coal plus coke railcars fell 31.2% in the week ended July 9, 2016, which was somewhat higher than the fall Norfolk Southern recorded in the same category. Coal accounted for 16% of CSX’s total volumes and 19% of its total revenues in 2015.

According to the U.S. Energy Information Administration, the Appalachia region’s coal output is expected to fall by 9% in 2016. However, the agency expects total coal production to increase by 2% and stabilize in 2017. CSX mainly connects coal mining operations in the Appalachian mountain region.

The Eastern railroads have cited electricity generation plants’ shift from coal to natural gas (UNG) as one of the reasons for the fall in utility coal transportation. The coal tsunami has affected major coal producers in the US like Alliance Resource Partners (ARLP), CONSOL Energy (CNX), and Peabody Energy (BTU). Due to the sharp decline in coal prices, Peabody filed for Chapter 11 bankruptcy protection in the US on April 13.

Commodity groups

Only the waste and non-ferrous scrap commodity group posted gains for CSX in the week ended July 9, 2016. The main bear commodity groups were petroleum and petroleum products, farm products, metallic ores, non-metallic minerals, and motor vehicles and parts.

You can compare this week’s rail data with data from the previous week in Why Freight Rail Traffic Rose in the Week Ending July 2. For more information on major US railroad stocks, visit Market Realist’s railroads page.

We’ll go through CSX’s intermodal traffic in the next article.

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