In the week ended December 10, 2016, CSX’s (CSX) overall carloads fell 6.1% compared to the week ended December 12, 2015. In the 2016 week, the company hauled 72,000 railcars against nearly 77,000 in the corresponding week last year. Its carloads, excluding coal and coke, fell 7.6%, in contrast to Norfolk Southern (NSC).
On an overall basis in the reported week, CSX recorded a larger fall in railcar volumes against the 4.3% fall reported by US railroads.
To compare our reported week’s traffic data with the previous week, please refer to Freight Rail Traffic for the Week Ended December 3.
Why coal carloads matter
CSX’s coal plus coke railcar volumes fell 2.0% in the week ended December 10, 2016. Its archrival Norfolk Southern (NSC) reported a 7.3% fall in coal and coke railcars that week. Coal accounted for 13.2% of CSX’s total volumes and 17.2% of its total revenues in 3Q16.
According to the EIA’s (U.S. Energy Information Administration) December 6, 2016, forecasts, US coal output is expected to fall 15.0% in 2016. That would be the lowest level of coal production since 1978. However, the EIA predicts a 2.0% rise in 2017 coal production.
Eastern railroads have cited a shift from coal to natural gas (UNG) in electricity generation plants as one of the reasons for the fall in utility coal transportation. The coal tsunami has affected major US coal producers such as Alliance Resource Partners (ARLP), Consol Energy (CNX), and bankruptcy-declared Peabody Energy (BTU).
The bull and bear commodity groups
Below are the commodity groups that posted significant rises in the week ended December 10, 2016:
- farm products (excluding grain)
- non-metallic minerals
- waste and nonferrous scrap
- iron and steel scrap
Below are the prominent laggard commodity groups:
- metallic ores
- petroleum and petroleum products
- primary metal products
- primary forest products
You can get detailed information on US Class I railroads on Market Realist’s railroads page.
We’ll look at CSX’s intermodal traffic in the next part.