Rail Coal Volumes Forecast to Rise in Q4; Tank Car Capacity Threatens

Telegraph's Freight Market Intelligence division projects a modest but historically significant reversal in coal rail volumes, forecasting under 1% year-over-year growth in Q4—the first uptick after more than a decade of secular decline. This uptick is primarily driven by export opportunities, with major carriers CSX and Norfolk Southern both reporting coal volume gains. The secondary catalyst is moderating coal plant retirements as data center buildout increases domestic electricity demand, creating a structural tailwind for domestic coal movement.

The forecasting agency flags a critical supply-demand mismatch: while tank car volumes are projected to grow nearly 10%, Congressional efforts to accelerate the DOT-111 tank car phase-out (currently mandated for 2029) could artificially constrain supply precisely when demand for moving plastics, chemicals, and petrochemicals is rising. This confluence creates operational risk for shippers reliant on hazmat rail capacity. Separately, intermodal rail is experiencing capacity stress, with truck-to-intermodal pricing gaps at 34% driving all-time-high volumes—a trend that may be approaching network saturation limits across major rail corridors.

For supply chain professionals, this report signals both opportunity and constraint. The modest coal recovery reflects broader economic resilience, but the tank car supply squeeze and intermodal capacity concerns require immediate contingency planning, particularly for chemical and petrochemical shippers who may face modal bottlenecks or rate pressure in coming quarters.