CSX Corporation (CSX) is a major operator in the Eastern US and competes with Norfolk Southern (NSC). In the week ended August 6, 2016, CSX’s carloads excluding coal and coke fell by 7.8%—almost the same as reported by NSC.
Overall, CSX hauled more than 69,000 carloads in the reported week of 2016, as compared to nearly 78,000 carloads in the week ended August 8, 2015. This represents a 10.6% fall in weekly carloads YoY (year-over-year). Compared with the fall in total US railcar volume, CSX recorded a higher fall in the reported week of 2016.
Why do coal carloads matter to CSX?
CSX’s coal plus coke railcars fell by 19% in the week ended August 6, 2016. This was slightly higher than the fall recorded by Norfolk Southern in the same category. Coal accounted for 16% of CSX’s total volumes and 19% of its total revenues in 2015.
CSX mainly connects coal mining operations in the Appalachian mountain region. According to US Energy Information Administration, the region’s coal output is expected to fall by 9% in 2016, but the agency expects total coal production to increase by 2% subsequently and to stabilize in 2017.
Eastern railroads have cited the shift from coal to natural gas (UNG) of electricity generation plants 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). Peabody filed for Chapter 11 bankruptcy protection in the US on April 13.
Bull and bear commodity groups
The commodity groups that posted significant gains in the week ended August 6, 2016, include:
- farm products (excluding grain)
- lumber and wood products
- non-metallic minerals
- crushed stone, sand, and gravel
The prominent laggard commodity groups were grain, grain mill products, petroleum and petroleum products, primary forest products, and metallic ore.
We’ll go through CSX’s intermodal traffic in the next part.