Coal rail volumes, which have been in secular decline for more than a decade as utilities have shifted generation toward natural gas and renewables, are forecast to post slight year-on-year gains in the fourth quarter, according to the newly released Market Consist Report from Freight Market Intelligence Telegraph. The firm projects under 1% growth in national carload coal volumes on a year-over-year basis — small in absolute terms, but a notable reversal for a commodity that has been shedding rail share for years. Coal remains one of the largest single commodities moved by U.S. Class I railroads, so even marginal volume shifts carry weight for network planning.

David Correll, director of Freight Market Intelligence at Telegraph, said the uptick is being driven primarily by export opportunity, with CSX and Norfolk Southern both showing coal volume growth in their second-quarter results. Both railroads serve Atlantic and Gulf export terminals that have increasingly handled metallurgical and thermal coal destined for overseas markets as domestic consumption has eroded. Slowing retirements of coal-fired power plants — as the data center buildout raises domestic electricity demand — add a secondary tailwind, since data centers are among the fastest-growing sources of U.S. power demand and have prompted some utilities to extend the operating lives of existing generation assets.

“I don’t want to say that we’re completely flipping the script,” Harrell said. “It’s gradual and it’s modest.”

Tank Car Supply Squeeze Flagged

The six-month forward-looking report, which Harrell said has achieved 95% to 97% accuracy in most cases, also flags a potential supply squeeze in tank cars. Telegraph is forecasting just under 10% growth in tank car volumes, but a push in Congress to accelerate the existing DOT-111 tank car phaseout — currently mandated by the end of 2029 — could remove supply precisely when demand for moving plastics, chemicals, and petrochemicals is rising. The DOT-111 is an older, non-pressurized tank car design that regulators ordered phased out for flammable-liquids service following a series of high-profile derailments, including the 2013 Lac-Mégantic disaster; accelerating its retirement would shrink the available fleet faster than replacement cars are typically built.

“The confluence of those two events is what we wanted to highlight in this most recent report,” Harrell said, referring to the volume growth forecast and the potential acceleration of the DOT-111 retirement timeline.

Broader Rail Outlook

On the broader freight rail outlook, Harrell described the firm’s volume forecast through the end of the year as “pretty bullish,” citing data center construction, general shipper optimism, ongoing tariff activity, and global energy price dynamics tied to the war with Iran. He noted that U.S. natural gas input costs have not risen in step with global crude benchmarks, giving domestic manufacturers a comparative cost advantage that is translating into new export freight flows moving on rail.

Intermodal was another focal point. Dr. David Correll noted that the truck-to-intermodal price delta stood at 34% as of the interview date, and that rail intermodal volumes have reached all-time highs — a trend he linked to shippers reconfiguring supply chains that began shifting in earnest around July. Historically, wide truckload-versus-intermodal spreads have pushed freight from highway to rail, and the current gap is doing so at scale. Harrell agreed the spread is an upside factor for rail volume but raised a structural concern, saying he personally wonders “how much more we can grow given the network that we have” and that he believes intermodal may be approaching network capacity limits — a constraint that could cap how much of the truckload market rail can realistically absorb.

The Truck Driver Shortage Debate

Correll also addressed the long-running truck driver shortage debate, drawing on seven years of electronic logging device data analysis at the MIT Center for Transportation Logistics. The American Trucking Associations has for years estimated the driver shortage in the tens of thousands, a figure often cited in policy debates, but Correll argued that the U.S. does not face a true driver shortage, but rather a utilization problem — with driver time wasted at pickup and delivery locations creating an artificial sense of scarcity.

“We don’t have a shortage of truck drivers,” he said. “We just waste so much time of the truck drivers we have that it feels like a shortage.”

Key Points from the Report

Telegraph forecasts under 1% year-on-year coal carload growth in Q4, the first uptick in a decade-long secular decline, led by export demand at CSX and NS.

A congressional push to accelerate the DOT-111 tank car phaseout before the 2029 deadline could tighten supply just as tank car volume demand is forecast to rise nearly 10%.

The truck-to-intermodal price gap stands at 34%, fueling all-time-high intermodal volumes as shippers reconfigure supply chains away from truck.

This summary is based on a transcription of the interview; the full interview is available in the accompanying video on FreightWaves (original article).