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Three Railroads, One Record Quarter Courtesy of Diesel Fuel

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Three Railroads, One Record Quarter Courtesy of Diesel Fuel

Record-high diesel prices pushed freight off the highway and onto the railroads in the third quarter, lifting CSX, Union Pacific and Norfolk Southern to record revenue.

The three carriers shared analogous anecdotes that encompass the current state of Class I railroads, identifying elevated fuel costs, an exodus of truck drivers and capacity from the market and intermodal volume growth as reasons for the strong quarter.

The railroads have yet to reap the price benefits of the volume growth, since intermodal rates are set in an annual bid season each fall and winter. Freight that switched modes mid-year is riding on prices agreed before the truck market tightened until the 2027 bids reset them.

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CSX opened the sequence on Wednesday with revenue of $4 billion, up 12 percent year over year, as intermodal volume rose 7 percent to an all-time high of 820,000 units.

Union Pacific followed on Thursday with a 15 percent increase in operating revenue to $7.2 billion, with intermodal volume climbing 11 percent and domestic intermodal volume growing 13 percent to a fifth consecutive record quarter. The same morning, Norfolk Southern posted revenue of $3.5 billion, up 14 percent, with total volume up 3 percent and domestic intermodal units up 10 percent.

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