Weak Carload Performance Hurt Norfolk Southern’s Rail Traffic

Rail traffic decline

After registering strong double-digit rail traffic volume growth in Week 3, Norfolk Southern (NSC) reported a massive plunge in Week 4. The company’s total rail traffic fell 7.9% YoY (year-over-year) to 142,251 railcars from 154,478 railcars in Week 4 of 2018.

Weak Carload Performance Hurt Norfolk Southern’s Rail Traffic

NSC’s dismal rail traffic performance in Week 4 was mainly due to a 14.4% plunge in its carloads. In the fourth week, the Eastern US railroad company hauled 64,564 railcars compared to the 69,814 it moved in Week 4 of 2018.

Commodities excluding coal and coke, which accounted for 72% of Norfolk Southern’s Week 4 carload traffic, fell 11.2% YoY to 43,310 units from 48,757 units. Its coal and coke volumes plunged 21.8% YoY to 16,476 units from 21,057 units. The company’s volumes declined across all commodity groups except grain mill products, metallic ore, and waste and scrap materials.

Norfolk Southern’s carload decline was the highest among Class I railroad companies (XTN). In Week 4, Union Pacific (UNP) and Canadian Pacific Railway (CP) were the only two railroad companies that registered YoY growth in carload traffic volumes.

Intermodal volumes

Norfolk Southern’s intermodal traffic fell 2.6% YoY in Week 4 to 82,465 containers and trailers from 84,664 units. The company’s container traffic contracted 3.3% YoY to 74,563 units from 77,096 units. However, it registered 4.4% YoY growth in its trailer volumes to 7,902 units from 7,568 units.

During Week 4, all Class I railroad companies recorded YoY declines in intermodal units except Union Pacific and Canadian Pacific, which registered increases of 7.5% and 1.5%, respectively. Kansas City Southern (KSU) was the worst performer with a 29.1% YoY plunge in its intermodal units.

Next, we’ll discuss Canadian National’s rail traffic.