Traffic generation varied greatly for short lines in Q4, 2024
1/23/2025
By Jeff Stagl, Managing Editor
Not too good, but not all that bad. That’s how many regionals and short lines likely would describe their traffic in 2024.
In a collective context, carloads were relatively flat in the short-line industry last year, according to the RailConnect Index of Short Line Traffic compiled by Wabtec Corp.’s GE Transportation subsidiary. Through the 52-week period ending Dec. 28, 457 small railroads moved 5,956,290 carloads, up just a scant 0.4% compared with volume in the same 2023 period.
Carloads rose in just five of the 14 commodity categories tracked by the index, led by an 11.4% year-over-year gain in intermodal volume to 1,001,695 units. Much smaller gains were registered for carloads of ores (2.1% to 167,140 units); chemicals (1.6% to 1,021,015 units); grain (1.5% to 692,705 units); and farm and food products excluding grain (0.3% to 295,319 units).
Meanwhile, the major decliners among the categories were “all other carloads” at 10.3% (to 93,848 units), coal at 9.3% (to 258,593 units), metals and products at 4.3% (to 440,398 units), and stone, clay and aggregates at 4.1% (to 683,576 units).
In addition, paper products volume fell 3.2% to 302,096 units, motor vehicles/equipment loads decreased 2.8% to 196,870 units and petroleum/coke traffic dipped 1.5% to 187,088 units. Carloads of waste/scrap materials and lumber/forest products decreased only slightly.
Watco boosted ag product carloads in Illinois, Michigan and Kansas, where a new Bartlett soybean processing facility opened in Cherryvale in third-quarter 2024. That facility is served by the company’s South Kansas and Oklahoma Railroad (shown). WatcoUsing the RailConnect index as macro data, RailPrime each quarter aims to drill down to the micro level by polling a cross section of regionals, short lines and holding companies about their traffic performance. Following are comments about fourth-quarter and 2024 volume results gleaned from emails or interviews.
Overall, it was an OK traffic-building year for the major holding companies. Watco’s carloads rose 2.1% in 2024 versus 2023’s total. The company — which owns and operates nearly 50 short lines — also notched a modest 0.5% volume increase in Q4. Traffic was fairly flat from Q3 to Q4, Watco officials said.
Carloads in 2024 were driven by a 27.7% gain in heavy coal movements (mostly export coal) in West Virginia and Alabama and a 9.4% gain in agricultural products traffic. Ag product movements increased in Illinois, Michigan and Kansas, where a new Bartlett soybean processing facility opened in Cherryvale at Q3’s end, Watco officials said. The facility is served by Watco’s South Kansas and Oklahoma Railroad.
In Q4, the Alaska Railroad’s freight traffic — as measured by rail cars, trailers and containers — declined 2.6% due to the timing of barge arrivals and market conditions. Alaska Railroad Corp.In terms of the weaker traffic segments last year, frac sand carloads fell 30.8% — continuing a multiyear decline — and chemical carloads dropped 7.5%.
For OmniTRAX Inc., carloads were strong in 2024, climbing by a percentage in the low single digits, said Brian Ward, the company’s senior vice president of commercial operations. OmniTRAX owns more than 30 regionals and short lines.
“Excluding frac sand, our volume was up in the high single digits,” said Ward. “Strength was across the board, with primary strength in metals, fuels, minerals and grains.”
In Q4, OmniTRAX’s volume matched full-year trends, experiencing a normal seasonal slowdown in December, he said.
It wasn’t a particularly strong final quarter for Genesee & Wyoming Inc. (G&W). The owner of more than 100 regionals and short lines in North America registered a traffic decline of less than 1% in Q4.
For the Twin Cities & Western, carloads fell 12% in Q4 and were flat in 2024. The short line consolidates its carloads with subsidiaries Minnesota Prairie Line and Sisseton Millbank Railroad. Twin Cities & Western Railroad Co.Weaker metals and minerals/stone traffic resulting from soft market conditions and some weather impacts primarily were the culprits. The company wasn’t yet ready to comment on full-year carloads, G&W officials said.
Conversely, Sierra Northern Railway CEO Kennan Beard is more than ready to talk about the northern California short line’s traffic in 2024, even though final figures haven’t been tallied.
“Our carloads continued to trend up through the entire year. It looks like [our] traffic was up nearly 10% for the year, matching the first three quarters,” he said. “Most of the growth can be attributed to an expansion of two of our transload operations, one in West Sacramento and one in Oakdale.”
Beard didn’t comment on Q4 carloads for Sierra Northern Railway, which operates about 100 miles of track and interchanges with BNSF Railway Co. and Union Pacific Railroad.
Meanwhile, it was an up and down year and final quarter for sister roads Red River Valley & Western Railroad Co. (RRVW) and Twin Cities & Western Railroad (TCWR). RRVW’s traffic in 2024 climbed 13%, in part because ethanol volume shot up 15% due to changes in market share. The 500-mile regional interchanges with BNSF Railway Co. and Canadian Pacific Kansas City.
“Grain carloads were up 46% year over year, driven by steady export demand for corn out of North Dakota for the first three quarters of 2024,” said Victor Meyers, the president of both RRVW and TCWR. “The 2023 grain carloads were incredibly soft on RRVW, and the 2024 volumes represent more normalized activity.”
Owned by Anacostia Rail Holdings, the Chicago, South Shore & South Bend struggled to build traffic last year, registering a 7.5% carload decline in 2024 and 17% volume drop in Q4. Anacostia Rail Holdings LLCIn Q4, RRVW’s carloads ratcheted up 1%. Overall grain demand softened compared to Q4 2023, and especially weakened in November and December, said Meyers.
For TCWR, carloads were flat in 2024 and fell 12% in Q4. The short line consolidates its carloads with subsidiaries Minnesota Prairie Line Inc. and Sisseton Millbank Railroad.
Overall grain demand also softened for TCWR in Q4 versus Q4 2023 and, as a result, grain traffic declined 6%. The 360-mile short line operates in Minnesota and South Dakota, and interchanges with BNSF, CN, CPKC, Union Pacific Railroad and Minnesota Commercial Railway.
On the plus side, the short line’s sugar traffic was strong last year, with carloads increasing 15% due to increased production from the 2023 crop, a reasonably sized 2024 crop and healthy domestic sugar demand, said Meyers.
In addition, aggregate carloads shot up 96%, driven by a new aggregate transload on the TCWR, and ethanol carloads rose 11% primarily because of increased customer production, he said.
There also was both good news and bad news traffic-wise for the Reading, Blue Mountain and Northern Railroad Co. (RBMN) in 2024. The 400-mile Pennsylvania regional handled about 32,000 revenue carloads, down 10% year over year, but earned record annual freight revenue because of a traffic mix shift.
Although frac sand carloads dropped because of the steep decline in Marcellus Shale oil-drilling activity, anthracite coal and forest products traffic thrived in 2024. Anthracite coal carloads exceeded 1 million tons for just the second time in the regional’s 34-year history and revenue from that business increased by a double-digit percentage, RBMN officials said.
In terms of forest products, the railroad benefited from growth in paperboard movements and an aggressive marketing program to encourage woodpulp producers to take greater advantage of the railroad’s warehouse.
Based on preliminary traffic forecasts, RBMN officials expect the railroad to increase both carloads and revenue significantly in 2025.
Unfortunately for the New Orleans Public Belt Railroad Co. (NOPB), it wasn’t a particularly good full year or final quarter. Total car count declined 4% in Q4 due to weak intermediate rail-car volumes from Class I partners, NOPB officials said. The short line operates 26 miles of mainline track and 75 miles of total track, and interchanges with all six Class Is.
Interline “load In” volumes decreased 2% and interline “load out” volumes declined 3.5% in the quarter.
For all of 2024, NOPB’s volume dropped compared with 2023’s level.
“This is again due to weak interchange volume from our Class I railroad carriers,” NOPB officials said. “On a positive note, our industry switch and storage numbers all increased during this timeframe.”
The Chicago, South Shore & South Bend Railroad (CSS) struggled to build traffic last year, too. The Anacostia Rail Holdings-owned short line posted a 7.5% carload decrease in 2024 and 17% traffic drop in Q4.
Overall, CSS moved 4,000 fewer cars in the full year and 2,400 fewer cars in the quarter. The 182-mile short line — which operates in and around Chicago and in northwest Indiana — interchanges with 16 other railroads, including all the Class Is.
“The biggest hitter for Q4 and the full year was a coal customer that had various unplanned outages and the soft U.S./global steel market,” said CSS President Todd Bjornstad.
Ditto for Paducah & Louisville Railway Inc.’s (PAL) traffic performance in Q4 and 2024. Volume was down year over year in both periods.
The main impediment: A decline in coal carloads due to back-to-back to-back mild winters and summers, which resulted in large stockpiles at utilities and in the railroad’s terminals, said PAL VP of Marketing and Sales Kevin McEwan. The 280-mile regional — which also owns and operates the Appalachian and Ohio Railroad Inc. and Evansville Western Railway Inc. — interchanges with BNSF, CN, CSX and Norfolk Southern Railway.
“All other commodities, specifically in chemicals, auto, minerals and lumber, had increases in volumes, but overall were offset by the decline in our coal volumes,” said McEwan.
Indiana Harbor Belt Railroad Co. (IHB), which like CSS operates in Chicago, had a rough quarter, too. The railroad’s carloads fell 11% in Q4. The largest U.S. switch carrier operates 54 miles of mainline track and 266 miles of yard and siding track.
“We had a large customer with an unplanned plant outage and our intermediate auto traffic was also off plan,” said IHB General Manager John Wright.
“Off” also characterized quarterly traffic for Anacostia Rail Holdings’ Northern Lines Railway (NLR). The 25-mile Minnesota short line’s traffic dipped a bit in Q4.
Uncertainty in the marketplace — due to such trends as rising interest rates — was a factor, said NLR President Quentin Schulte.
“Interest rates and the election year were the most common factors from our base,” he said, adding that a customer relocation was a minor factor.
Alaska Railroad Corp. also had a tough quarter, as well as a trying year. The regional’s freight traffic in Q4 — as measured by rail cars, trailers and containers — declined 2.6%. The railroad attributes the drop to the timing of barge arrivals and market conditions.
In 2024, the regional’s traffic decreased by 2.7% compared with 2023’s mark, primarily due to market conditions.
So how has traffic fared for small roads so far in 2025? Through the year’s first three weeks ending Jan. 18, 455 regionals and short lines handled 321,258 carloads, up 3.6%, according to the RailConnect index. Grain traffic was up 16%, intermodal loads were up 8.4%, and chemicals, coal, farm/food products and paper products traffic each were up around 5%.
