US coal trains move faster as volume inches up

Market: Coal, Coking coal, Electricity
18/07/23

The largest US railroads moved coal at a faster pace during the second quarter, creating additional rail network capacity, but volume rose only slightly compared with a year earlier.

Coal volume did not grow significantly in the last three months because mild weather and lower natural gas prices offset demand for spot purchases. Utilities often increase purchases ahead of summer generating demand, but this year lower coal generating demand allowed power plants to grow stockpiles and store the coal necessary for summer.

As a result, the four Class I railroads that ship the most coal — BNSF, CSX, Norfolk Southern (NS) and Union Pacific (UP) — loaded 822,569 railcars with coal during the three months ended on 30 June, up by 0.4pc compared with the same time in 2022, US Surface Transportation Board (STB) data show.

Coal volume at BNSF, which hauls the most coal, actually fell by 3pc from a year earlier. BNSF's shipments of Powder River basin (PRB) coal, the most prolific US coal region, fell by 4.2pc compared with second quarter 2022.

BNSF could have shipped more coal. The railroad's average coal train speed rose by 0.9pc in the second quarter to 24.3mph, which would have allowed it to put additional trains into service.

The drop was offset by increased shipments by the other railroads. Western rival UP increased coal loadings by 1.3pc to 186,968 railcars. It was able to raise its PRB coal car loadings by 5.1pc from a year earlier. UP's Uinta basin coal train loadings fell by 22pc, in part because of the idling of American Consolidated Natural Resources' Lila Canyon mine. The operation has been shut since a fire in September 2022.

UP had more capacity to haul coal as its coal train speed rose by 2.7pc to 25.5mph from a year earlier.

Eastern carriers CSX and NS also hauled more coal, increasing shipments by 6.9pc and 2.2pc respectively. East coast export demand helped drive that increased coal volume.

CSX shipments of Central and Southern Appalachian coal rose by 3.4pc and 61pc, respectively. Illinois basin coal car loadings rose by 9.2pc. But Northern App volume fell by 2.7pc from second quarter 2022, STB data show.

CSX was able to handle more coal shipments because of a 17pc jump in coal train speed to 23.4mph in the second quarter compared with 20.1mph in the year-earlier period.

NS coal train speed fell by 2.9pc to 16.1mph during the second quarter. However, the railroad still increased coal car loadings to 127,627 railcars in the quarter, up by 2.2pc from second quarter 2022.

NS' loadings of Central App coal in the rose in the quarter by 2.9pc, while Southern App volume more than doubled. Those increases helped offset lower shipments of Northern App and Illinois basin coal, down by 8.9pc and 23pc, respectively.

By Abby Caplan

Union Pacific coal trains loaded trains

BNSF coal trains loaded trains

Norfolk Southern coal trains loaded trains

CSX coal cars loaded ’000 railcars

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