Coal Traffic Briefly Rebounds on American Railroads

Two Norfolk Southern coal trains, one loaded and one empty, meet at Clarksville, Pa., in May 2018. Photo by Steve Barry.

Coal Traffic Briefly Rebounds on American Railroads

By S.D. Lindsey

ATLANTA — As Norfolk Southern entered the final months of 2021, it was experiencing carload trends the opposite of what most analysts expected at the beginning of the year — or even the last few years.

Instead of a continued decline in the coal business, one NS executive described the demand for black gold in September as “incredible.” During the third quarter, NS coal and coke traffic was up 12,544 carloads, a nearly 9 percent jump from Q3 2020. The same could be said for other railroads. According to the Association of American Railroads, coal traffic was up 9.3 percent the first full week of October compared to the same week last year. Overall, coal traffic is up 11.9 percent year-to-date compared to the same period in 2020. 

The NS executive noted carloads would have been even higher if not for limitations with coal production in the Appalachian region due to labor shortages and hesitation to invest in mine capacity. This surge is being driven by a number of factors they said, such as overall energy demand, global steel production, higher natural gas prices, and China’s recent cuts in coal imports from Australia. In the United States, power companies are ramping up coal consumption due to the higher natural gas prices. Coal-fired generation is expected to be up 22 percent this year, the first annual increase like that since 2014.

Although industry observers said this turnaround in the coal industry is not expected to be long-term, it should mean more coal trains running on NS and other roads well into 2022.

This article was posted on: October 19, 2021