One of the success stories for the railroads (at least some) in 2011 so far has been the rise in coal traffic. Ton miles and revenue of coal are both up for Class I railroads, much more than was expected at the start of the year with the rather pessimistic outlook at the Energy Information Agency of the Department of Energy.

Norfolk Southern and Union Pacific show increased car loadings, while CSX and BNSF show traffic losses during the first quarter from fourth quarter levels. Projecting the first quarter results for the year, NS and UP show substantial gains while CSX and BNSF either lose traffic in 2011 or stay even with 2010 levels.

The EIA is more optimistic for 2012, but they have not reached a firm conviction regarding the long term fate of this traffic sector. There are many who look at the past years’ totals as the peaks of this important railroad traffic sector and forecast plant closings and decreased demand in later years for coal. On the other hand, increased demand from abroad may keep coal production rising and traffic levels from falling even as less coal is burned in the US Environmentalists are fighting coal exports, but they have fewer weapons for this battle.

For the present, the traffic gains in the UP and NS are a nice surprise and show no sign of weakening as we go into the summer months.

(Sourced from www.glgroup.com)