More than 20% of total rail carloads stem from the coal industry. Because of this reliance on coal shipments, CSX (CSX 0.53%) and Norfolk Southern (NSC +0.35%) each saw revenues from coal shipments drop by double digits in the first quarter of 2013 versus the same quarter last year. This also can't be great news for Warren Buffett's Berkshire Hathaway (NYSE: BRK-A), as it owns BNSF railroads, which holds a 33% market share in coal shipments by rail, according to 2012 data.
These companies cater to the eastern United States, which has seen its coal industry hurt to a much greater degree than miners out west, such as Peabody Energy and its Powder River Basin thermal coal production. Coal from this region is produced further down the cost curve and is competitive with much lower natural gas prices than the Appalachian output.
For more on this topic and our analysts' opinions on the matter, tune in to the following video.
