Norfolk Southern’s carloads
Norfolk Southern (NSC) and CSX (CSX) run a virtual duopoly in the eastern United States. In the week ended February 18, 2017, NSC’s overall railcar volumes rose 7%. There were around 68,000 railcars, compared with 63,000 in the week ended February 20, 2016.
Railcar volumes, excluding coal and coke traffic, rose 5.2% YoY (year-over-year) in the seventh week of 2017. Since the beginning of 2017, NSC’s overall carloads have been boosted by higher coal volumes. NSC’s coal (ARLP) volumes rose ~12% YoY in the week ended February 18, 2017.
Why coal matters for NSC
Coal (CNX) made up ~15% of the company’s 2016 revenue, falling from 23% in 2009. However, recent trends in coal prices have kindled the hopes of coal producers. Norfolk Southern expects to handle 17 million–19 million tons of utility coal per quarter in 2017.
The company assumes weather-related normalizations in the utility coal segment. Similarly, NSC 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 February 18, 2017, advancing commodity groups were as follows:
- crushed stone, sand, and gravel
- grain mill products
- metals and products
- iron and steel scrap
The major laggards in the seventh week were the following:
- food and kindred products
- motor vehicles and equipment
- petroleum products
- pulp, paper, and allied products
If you want to compare this week’s freight volume data with the previous week’s, check out Market Realist’s A Light at the End of Tunnel: Rail Traffic, Week Ended February 11. In the next part, we’ll look at NSC’s intermodal traffic for the week ended February 18, 2017.