Boost in U.S. Rail Shipments Reflects Bump in Coal Volumes

Researched by Industrial Info Resources (Sugar Land, Texas)--Led in part by an upswing in coal shipments, U.S. rail traffic in the first half of 2017 was up 4.5% compared with the same six months last year, according to the Association of American Railroads (AAR).

Total U.S. carload traffic for the first six months of 2017 was 6,699,453 carloads, up 6.4%, or 404,078 carloads, from the same period last year, the AAR reported last week. It also reported a record 6,892,673 intermodal units, up 2.7%, or 179,515 containers and trailers, from last year, and up 0.5%, or 32,614 units, over the previous record in the first half of 2015.

One of the drivers for the increase in railcar traffic has been a jump in coal shipments, which have increased year-over-year for each of the past six months. In June, coal shipments were up 40,333 carloads, or 13.2%, from June 2016. Excluding coal, U.S. rail car shipments in June were up 4,841 carloads, or just 0.7%, over June 2016. Gains were also seen in June for crushed stone, gravel, and sand (up 16,747 carloads, or 18.5%) and chemicals (up 4,888 carloads, or 4.1%).

Commodities that saw declines in June 2017 from June 2016 included motor vehicles and parts; petroleum & petroleum products; and metallic ores.

Monthly gains in coal shipments for the first half of this year over the same period last year have ranged from 11.9% to 26.7%.

The shipments reflect U.S. coal production statistics. According to the Department of Energy, U.S. coal production during the first five months of 2017 totaled 322,852,000 tons, up 48,968,000 tons, or nearly 18%, from 274,154,000 tons produced in the same five months of 2016. U.S. coal consumption for the first three months of this year was 173,857,000 tons, up 7,947,000 tons, or 4.7%, from 165,910,000 in the first three months of 2016.

However, the total amount produced and shipped so far in 2017 is still far below what it was in the years before 2016, as coal's share of the U.S. energy mix continues to drop. Production for the first five months of this year was 16.3% less than what it was for the same period of 2015. Coal production for all of 2016 was 728,232,000 tons, down 168,709,000 tons, or 18.8%, from 896,941,000 tons produced in 2015. For related information, see June 20, 2017, article - Glum and Glummer: BP Sees Bleak Global Outlook for Coal Through 2035.

AAR Senior Vice President of Policy and Economics Jon T. Gray noted earlier this year that the 19.2% increase in coal carloads seen in February was the highest percentage gain for coal since sometime before 1988, when the AAR's current record season began. But he added: "While it's an impressive gain, February 2017 was, unfortunately, also the second worst February in absolute terms for coal since sometime before 1988. It's all too representative of the challenges railroads are facing as their markets change."

Still, Industrial Info is tracking smaller new coal mine developments that are scheduled for completion this year, as President Donald Trump pushes to revive the industry. For related information, see June 5, 2017, article - Not Fake News: New Coal Mines Opening in U.S., Just Not Very Big Ones.

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