* Rail volume growth has slowed significantly over the past several weeks and the trend has been below Wall Street's expectations for most of the major railroads.
* Despite continued support from YoY growth in coal (+5.3%), agriculture (+6.5%), further weakness in the economically sensitive industrial segments such as chemicals, forest products, metals and a deceleration in the pace of inter-modal growth (+1.2%) have caused total volume growth for the major railroads to fall to +0.6% vs 3.3% growth in the 3rd Q.
* Automotive production cuts and plant closures have been a drag on growth for most of the rails, while the housing slowdown is showing up in reduced shipments of building materials alongside weakness in forest products, which has also driven weakness in rail volumes.
* The average fuel surcharge posted rates in 4Q have fallen from 3Q due to the decline of fuel prices in late August and September. In light of the recent softness in the weekly rail volumes, analysts could start cutting/adjusting EPS estimates of CSX Corporation (CSX), Norfolk Southern Corp. (NSC) etc.
NSC 1-yr chart