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Railroads to lose revenue as coal demand continues to fall

September 4, 2019

OMAHA, Neb. (AP) — Demand for coal is likely to continue declining over the next decade by more than 50% as utilities rely less on the fuel, so Moody’s predicts railroads will lose significant revenue.

Moody’s estimates major U.S. railroads will lose about $5 billion in coal revenue by 2030, which would represent about 5.5% of the industry’s revenue last year.

Utility demand for coal is expected to decline by 7% a year until 2030. And that follows nearly 20 years of steady declines in coal demand.

But Moody’s said railroads should be able to offset at least part of the coal decline with growth in other areas of freight, particularly intermodal shipments.

The rail industry is also working to improve its operations and reduce costs, which should also help offset the reduced revenue.

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