UNP Union Pacific Corp

By Colin Kellaher

North American rail traffic fell 5.1% last week, as continued sharp declines in U.S. volumes more than offset rises in Canada and Mexico, data from the Association of American Railroads showed.

Carload volume for the week ended July 6 on a dozen reporting U.S., Canadian and Mexican railroads fell 5.3%, while intermodal traffic fell 4.8%, the trade group said Wednesday.

North American rail traffic was 3.3% lower in the week ended June 29. For the first 27 weeks of the year, North American volume is down 2.1%.

The AAR said U.S. rail traffic tumbled 7.5% last week after falling 5.5% a week earlier.

U.S. carloads fell 8.2% amid a nearly 22% drop in shipments of coal, the largest of the 10 commodity groups tracked, while the volume of U.S. intermodal containers and trailers fell 6.9% for the week.

U.S. coal shipments have been hurt by weak export markets and poor demand from U.S. electric utilities.

Analysts at Seaport Global Securities this week said the market for utility coal started the year in good shape but has gotten materially worse ever since thanks to a drop in natural-gas prices. The Seaport analysts also warned that most investors they spoke with think the U.S. utility coal market will be worse next year.

U.S. rail traffic is now down 3.2% for the year to date, compared with a cumulative decline of 3.1% at the end of the previous week, the AAR said.

The AAR said rail traffic rose 1.5% in Canada last week, as a 3.5% increased in intermodal units more than offset a 0.2% drop in carloads.

Rail traffic rose 2.5% in Mexico last week amid a strong 9.2% rise in carloads. The volume of intermodal units fell 4.8%.

Write to Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

July 10, 2019 13:23 ET (17:23 GMT)

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