Posts Tagged ‘Railroad coal traffic’

Loss of Coal Traffic Drove Class 1 Freight Volumes Downward During 2nd Quarter of 2020

July 3, 2020

Loss of coal traffic was a major driver in sharp volume declines for North America’s Class 1 railroads in the second quarter of 2020.

The carriers posted an aggregate 19 percent decline during the period with Norfolk Southern taking a 56 percent hit.

From a historical perspective, coal traffic was down 34 percent when compared to the volumes posted in the second quarter of 2019.

NS also suffered a steep 26 percent drop in overall traffic during the second quarter of 2020 due to shut downs of automotive plants amid the COVID-19 pandemic.

Automotive plants were closed during April and much of May but have since reopened.

Intermodal traffic was down a collective 11 percent for the Class 1 railroads during the quarter.

It also presented a sharp contrast. On one hand parcel shipments increased as consumers relied more heavily on e-commerce during stay home order periods.

But that was more than offset by the closure of numerous retail stores and falling international intermodal shipments because retailers maintained high levels of inventory during their shutdowns.

Carload traffic for the Class 1 railroads was down 22 percent collectively with NS suffering the greatest loss at 30 percent. This category excludes coal and intermodal shipments.

Second quarter financial results for publicly traded Class I railroads will be released later this month.

Grain Traffic Bright Spot for U.S. Railroads

September 21, 2016

The Association of American Railroads said that grain traffic by rail this year has been surpassing carload numbers from 2015, with grain carloads up by more than 26 percent to 22,599 carloads.

AARThis equates to more than 250 90-car unit grain trains per week.

AAR said the first two weeks of September have yielded higher volumes of grain shipments and that during August grain traffic averaged about 25 percent higher than during the same month last year.

Grain is one of the few commodity groups in which the AAR has been posting substantial traffic increases. Coal and energy-related commodities continue to tumble.

Overall U.S. rail traffic is down more than 5 percent in 2016 when compared to 2015.

BNSF’s Rose Doesn’t See Coal Volumes Returning

August 11, 2015

A top U.S. Class 1 railroad executive told an energy conference that coal traffic on the railroads is in decline and that it is not going to recover.

In fact, Matthew K. Rose, the executive chairman of BNSF, fears that the Power River Basin line may become stranded assets.

Rose, speaking at the U.S. Energy Information Agency’s 2015 EIA Energy Conference, said changing energy policies have led to falling coal volumes.

In 2006, BNSF moved 287 million tons of coal out of the Powder River Basin in Wyoming and Montana.

“It was a time of heavy coal demand,” Rose said. “We had a severe weather disruption in the basin that constricted deliveries going into the summer. The administration and Capitol Hill strongly believed that our investment in our coal network was insufficient and that much more investment was needed if we were to meet the forecast of demand going forward. We invested heavily and now the capacity and the operations of the [Powder River Basin] lines are very, very impressive.”

Less than a decade later, Rose doesn’t believe that BNSF will see that level of coal volume again.

“That leaves us with millions of dollars in investment in what will eventually be stranded assets,” he said.

For now, Powder River coal remains important to BNSF’s bottom line, accounting for about 20 percent of its traffic and 25 percent of its revenue.

Rose doesn’t believe that the same scenario will play out with crude oil, “because other commodities benefit from the expansion of these crude routes.”