No. 3 U.S. railroad CSX Corp says lower freight, particularly a 31 percent drop in coal volumes, hurt its first-quarter profit, and it expects coal to weigh on earnings throughout 2016.
Like the other major U.S. railroads, CSX has seen coal volumes plummet since early 2015, driven by utilities switching to cheaper natural gas amid low energy prices and coal exports falling because of the strong U.S. dollar.
"The coal dynamic is very negative for the railroads and it will continue to be very negative for them," Chris Wetherbee, transportation analyst at Citi, told CNBC's "Squawk Box" on Wednesday, a day after CSX's earnings statement.
"If we look at CSX's peak-to-trough coal volume, we're going to be down almost 60 percent this year from 2008, so it's pretty remarkable how much this volume is down," he said.