North American rail traffic saw a mixed performance in Week 43, with significant disruptions impacting major lines. Bill Stephens of Trains Magazine breaks down how record-breaking rainfall in New Mexico and a massive CSX tech outage led to operational challenges. Learn how these events impacted intermodal and carload volumes, and what Q3 earnings reveal about the resilience of Class 1 railroads.
North American rail traffic rose 4.3% in week 43 compared to a year ago, the Association of American Railroads reported, but that headline figure masked two acute service disruptions that pulled U.S. intermodal growth sharply below its recent 10% pace. BNSF’s Southern Transcon — the busiest mainline and intermodal corridor in North America — was shut down for roughly 60 hours after record flooding in New Mexico, while a nearly 30-hour technology outage paralyzed CSX operations in the East.
Laguna, N.M., received 8 inches of rain over three days — against an annual average of 10 inches — triggering flooding that closed the Southern Transcon beginning Saturday, Oct. 24, and running through that Tuesday. BNSF’s intermodal volume for the week fell 0.4%, a stark reversal from a 14% gain the prior week. By contrast, Union Pacific, which also operates in the West and was unaffected, posted a 17% year-over-year intermodal gain for the same period.
The CSX technology outage began Oct. 27 and was resolved Oct. 28. The railroad was unable to call crews, issue train or work orders, or exchange data with other Class 1 railroads, cutting off interchange traffic entirely. RailState, which monitors rail movements through a network of trackside sensors, found that CSX train counts plunged 46% during the outage before rebounding sharply.
“CSX says this was not caused by a cyberattack and there was no data breach. And yesterday, a CSX spokesman told me the tech outage was caused by a disruption in a portion of its cloud computing infrastructure, and that they’re doing a comprehensive root cause analysis with their tech vendor partners.”
The Southern Transcon closure also created a feedback loop at the ports of Los Angeles and Long Beach. With the line down, BNSF could neither move loaded containers east nor reposition empty railcars west — compounding container dwell times at the ports. Speaker B noted that BNSF would have reopened the line in roughly 24 to 30 hours, but a second wave of heavy rain set back recovery efforts, extending the closure to 60 hours.
Beyond the disruptions, third-quarter earnings across the Class 1 railroads illustrated how rising volumes, higher rates, and fuel surcharge revenue combined to lift results. At Norfolk Southern, fuel surcharges accounted for 8 percentage points of a 14% revenue increase. Union Pacific’s revenue rose 6% excluding fuel surcharges but climbed 15% when surcharges were included. UP posted an operating ratio of 59.1 — below the 60 threshold — while CSX came in at 60.9. Canadian National was the lone railroad flat on volume, partly due to deliberate demarketing of lower-margin international intermodal traffic and production disruptions at Canadian coal mines.
For the broader week 43 U.S. numbers, overall volume was up 3.5% year over year. Chemicals and petroleum rose 6.6%, boosted by a 7.9% increase in chemical shipments. Motor vehicles and parts were up 9%. Coal was flat, and agricultural and food products slipped 2%, dragged down by an 8.3% decline in grain shipments.
- BNSF’s Southern Transcon, North America’s busiest intermodal corridor, was closed ~60 hours starting Oct. 24 after Laguna, N.M. received 8 inches of rain in three days, sending BNSF’s intermodal volume down 0.4% versus UP’s 17% gain.
- A ~30-hour CSX technology outage beginning Oct. 27 caused train counts to plunge 46%, according to RailState; CSX attributed it to a cloud computing infrastructure disruption, not a cyberattack.
- Q3 rail earnings showed fuel surcharges driving outsized revenue gains, with Union Pacific’s revenue rising 15% including surcharges versus 6% excluding them, and UP posting a 59.1 operating ratio.
This Summary is generated thanks to a transcription of the interview, for the full interview please enjoy the video above.
