Union Pacific's coal carloads in the fourth quarter fell 9.3% on a year-over-year basis, while coal revenues dipped 6.2%, the railroad said Thursday.
The Omaha, Nebraska-based railroad, the second biggest transporter of coal in the US behind rival BNSF Railway, said coal carloads totaled 320,000 compared with 353,000 in the year-ago quarter.
Beth Whited, the railroad's new vice president of marketing, said coal stockpiles at the utilities in its service territory stood at roughly 93 days of burn in Q4, roughly 18 days higher than historic levels but below the roughly 100 days of burn in the year-ago quarter.
"We have seen what I call a very modest fall off in inventory levels ... so it's still kind of a challenging stockpile environment," Whited said. "We are though in a little different situation then most of 2016, in that we have natural gas prices considerably higher ... so that gives us some potential for our served plants to be more in the money and able to burn coal."
Powder River Basin volumes dipped 16% from the year-ago quarter, while volumes from other regions, such as Colorado and Utah, increased 24% due to higher export demand, Whited said.
Coal revenues totaled $699 million in the fourth quarter, and made up 13.5% of the railroad's total quarterly revenue. In the year-ago quarter, coal revenues totaled $745 million and made up 14.3% percent of total revenue.
By comparison, coal revenues in Q4 2014 totaled $1.1 billion, but have largely declined due a drop in coal demand from low natural gas prices.
Average revenue per coal unit totaled $2,183 in the quarter, up 3.6% from the year-ago quarter.
For 2017, the railroad expects a modest increase in coal volumes due to higher natural gas prices and increased export demand.
