Coal traffic trends

Coal topped the list of commodities with the biggest decline in U.S. rail carload traffic last year, the Association of American Railroads (AAR) reported in its 2012 year-end traffic summary. Coal traffic dropped by 726,257 carloads, or 10.8 percent, in 2012 compared with 2011, followed by grain, down 106,289 carloads, or 9.5 percent; and metallic ores, down 22,421 carloads, or 5.7 percent.

"Coal and grain typically account for around half of U.S. rail carloads, so when they're down, chances are good that overall rail carloads are down, too, as we saw in 2012," said John Gray, AAR's senior vice president, in a prepared statement issued earlier this month.

Now that the calendar has flipped to 2013, I'm wondering what the headline will be for the coal carload story by year's end. Will the demand for domestic coal continue to decline, as some analysts have projected? What about the potential for coal exports -- will that demand be up or down, and how might that impact overall traffic?

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