North American Railroads to See Decline in Coal Freight Volumes in 2024

North American Railroads

In 2023, leading North American freight railroad companies—Union Pacific (NYSE: UNP), Canadian National Railway (NYSE: CNI), Norfolk Southern Railway (NYSE: NSC), Canadian Pacific Kansas City (NYSE: CP), and CSX (NASDAQ: CSX)—transported a combined total of 3.9 million carloads of coal (+2.5% YoY). According to Visible Alpha consensus, rail coal volumes for these companies are projected to decline by -4.9% year over year to 3.7 million carloads in 2024. This decline follows a two-year trend of muted growth driven by reduced coal use in electricity generation due to low natural gas prices and relatively milder winters across North America.

In contrast, combined rail intermodal volume, which reached 13.5 million carloads in 2023 (-5.6% YoY), is expected to rise by +5.2% year over year to 14.2 million carloads in 2024, driven by improved traffic in international intermodal transportation. This growth is expected to be partially offset, however, by a decline in domestic intermodal volumes. Intermodal transportation, involving the use of multiple modes such as trucks, trains, and ships, has been the fastest-growing segment of rail traffic, accounting for 45% of the total carloads transported by the five railroad companies in 2023.