Intermodal Traffic Increases on Southern West Va.'s Heartland Corridor

[NS Newsfeed]

As retailers prepare for the Christmas shopping season, intermodal traffic on a rail route through southern West Virginia is up.



Norfolk Southern's Heartland Corridor saw a 2 percent increase in intermodal traffic in the second quarter compared with last year, company executives said in a conference call last week.



"Generally, peak, for us, has been associated with their national volumes that largely shows up in August and September," Alan H. Shaw, the railroad's chief marketing officer and executive vice president said.



"And as we've noted, our international volumes are really healthy right now. We've got a good franchise. Customers are shifting more international volume to the East Coast ports, so there's opportunity for growth for us ... in August and September in our international franchise."



The Heartland Corridor is the second of NS track that carries, among other freight, cargo in double-stacked shipping containers between Norfolk, Va., to Chicago. Heading west, it enters West Virginia in Bluefield and runs through the Tug Fork and Big Sandy River valleys until it exits the state at Kenova.



West Virginia currently does not have an intermodal terminal on the Heartland Corridor, although one is being built at the Wayne County community of Prichard, near Kenova.



NS saw its intermodal revenues on all corridors total $633 million in the second quarter. That was 3 percent lower than in the second quarter 2014, as lower fuel surcharges more than offset volume gains. Higher shipments in the railroad's international business drove overall volume growth of 2 percent in the quarter compared with the same period of 2014, the company said in its earnings release.



"While current truck capacity and lower fuel prices have limited near-term growth in the market, contract rates in the truck market continue to climb. This environment, particularly as our service product continues to improve, bodes well for intermodal pricing moving forward," Shaw said.



Last week Norfolk Southern reported second quarter net income of $433 million, down 23 percent from a year ago. Executives attributed the decrease to fuel surcharges and the continuing downturn in the coal industry.



Coal revenue in the second quarter was $453 million, down 33 percent from a year ago, Shaw said.



"Coal market conditions will continue to challenge our coal volumes for the remainder of 2015. Natural gas price projections below $3 per million BTU have impacted coal burn, and current stockpile levels will present headwinds for utility deliveries," Shaw said.