Coal gains just a blip for railroads
Coal proved to be a revenue bright spot for CSX and Union Pacific last quarter, but that won’t change the long-term outlook for the fuel and its relationship to railroad shipping.
“Fossil fuels are dead. That's a long-term view,” said CSX CEO Hunter Harrison following the latest quarterly results. “It’s not going to happen overnight. It’s not going to be two or three years, but it’s going away in my view.”
Both CSX and Union Pacific have seen revenue from coal shipments steadily erode over the last few years and become a less important piece of their overall shipping. Cheaper natural gas has been driving down the use of coal and that dynamic isn’t expected to change.
The railroad companies have been restructuring to make their operations more streamlined. CSX has taken locomotives and freight cars out of service while also shutting rail yards to eliminate redundancy.
Source: FactSet *figures include only the first half of the year Damian Troise; Alex Nieves • AP