CSX: Railroads Face Recession-Like Pressures (rail volumes at Recession levels)

WSJ ^

[Red in Blue PA]

CSX Corp. executives said on Wednesday that current pressures on rail cargo volumes are at levels not seen outside a recession.

“You have multiple aspects working against you: the low [natural] gas prices, the low commodity prices, the strength of the dollar,” Chief Executive Michael Ward said during an earnings call with analysts. “Except for markets like automotive and housing related, you’re seeing pressure on most of the markets.”

[ProtectOurFreedom]

Ah yes. Good point. But the shift to NG was underway a log time ago due to a lot of factors in addition to low NG prices. It was mainly driven by Obamao”s goal of bankrupting coal powered utility companies in the name of Gaia. You just can’t convert coal fired boilers to gas — you have to build new combined cycle plants which takes quite a few years. I still don’t see how a rapid price reduction for NG would trigger fast railroad earnings reductions. Long-term, yes. But not in a scale of months or a year or two.

[okie01]

You just can’t convert coal fired boilers to gas — you have to build new combined cycle plants which takes quite a few years

As those conversions are completed, coal shipments would drop like a rock -- from trainloads to none.

I believe the two largest markets for coal shipments in the USA are power plants and export.

But I'd agree with your premise, conversion is probably a bigger factor in the traffic decline than lower prices.

[Outland]

I can get past WSJ’s paywall by pasting the headline into a Google search, then clicking the link in Google. Not sure why it works, though.

[Oatka]

Another cheery article:

Hope Fades for Dry Bulk Recovery as Baltic Index Crashes Below 400 Points