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Earlier this week, CSX Corp. (NYSE: CSX) reported quarterly results that were more or less in line with estimates, but the mix of shipments was not what the railroader was used to. Coal shipments were down 16% and revenue from coal shipments fell 17%. Union Pacific Corp. (NYSE: UNP) saw coal shipments fall 12% in the third quarter.

Today Norfolk Southern Corp. (NYSE: NSC) reported results that underscored the change in rail traffic. The company said that its coal carloads were down by 56,900 (16%) in the quarter compared with the same quarter a year ago. Revenue on coal shipments fell by $54 million sequentially, and revenue per carload fell to just over $2,000.

Like CSX, Norfolk Southern said intermodal shipments rose about 5% to 867,100 units, but revenue per unit is just $653, less than a third of coal revenue per unit. That won’t get the job done.

The short version of this story is that coal shipping is critical to rail revenues and profits.

But Norfolk Southern says that it expects the drop in coal shipments to continue “largely unabated” into next year. Coal shipments fell 15% in the month of September at Norfolk Southern and the company expects shipments to down a similar amount in the fourth quarter. Only Kansas City Southern (NYSE: KSU) looks able to dodge the downdraft from weak coal shipments on the strength of its freight shipments into Mexico.

Shares of Norfolk Southern are down 7.3% today, at $61.22 after posting a new 52-week low of $60.96. The prior range was $62.82 to $78.50.

Coal mining stocks are down more than 1.1% today and the Market Vectors Coal ETF (NYSEMKT: KOL) is down 0.1% at $25.26 in a 52-week range of $21.49 to $40.90.

Paul Ausick