Rail Freight Forecast: Coal Volumes Set for SHOCKING Q4 Uptick?

FreightWaves expert Dr. David Correll shares insights from Telegraph’s latest Market Consist Report, forecasting a surprising Q4 uptick in coal volumes driven by export opportunities. Get a 6-month outlook on freight rail service, intermodal volumes, and the impact of policy changes like the DOT-111 tank car phase-out. Discover how global energy prices and the data center build-out are reshaping the rail landscape, plus a deep dive into the truck driver shortage debate.

Coal rail volumes, in secular decline for more than a decade, are forecast to post slight year-on-year gains in the fourth quarter, according to Freight Market Intelligence Telegraph’s newly released Market Consist Report. 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.

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. Slowing retirements of coal-fired power plants — as data center buildout raises domestic electricity demand — add a secondary tailwind. “I don’t want to say that we’re completely flipping the script,” Harrell said. “It’s gradual and it’s modest.”

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 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.

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. 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.

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. He 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.”

• 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 generated thanks to a transcription of the interview, for the full interview please enjoy the video above.