By Jeff Stagl, Managing Editor
Through the year’s first half, regionals and short lines collectively were able to keep their carloads in the black — albeit by a very small margin — despite the ongoing macroeconomic uncertainty.
Through the 26-week period ending June 28, 456 small railroads logged 2,996,434 carloads, up a scant 0.9% year over year, according to the RailConnect Index of Short Line Traffic compiled by Wabtec Corp.’s GE Transportation subsidiary.
Among the 14 commodity groups tracked by the index, six registered gains while eight posted declines. The biggest gainer was intermodal traffic, which climbed 8.7% year over year to 543,248 units.
Other commodity groups with notable increases were grain at 4.5% (to 354,906 carloads); coal at 4.4% (to 124,248 carloads); waste and scrap materials at 3.5% (to 171,302 carloads); and lumber and forest products at 2.5% (to 146,337 carloads).
The largest decliner, by far, was “all other” traffic, which plummeted 19.5% to 39,613 units. In addition, ores traffic plunged nearly 14% to 73,830 units.
On a smaller scale, paper products traffic dipped 4% to 147,879 units; motor vehicles/equipment loads slipped 2.2% to 100,523 units; metals and products traffic decreased 1.9% to 223,368 units; and stone, clay and aggregate loads similarly dropped 1.9% to 329,961 units.
To learn how the first half panned out traffic-wise for individual regionals, short lines and holdings companies, RailPrime reached out to more than a dozen of them. The following 12 responded via email.
Holding companies hold their own
Among the short-line industry’s holding companies, Watco registered a 0.7% traffic increase in the first half. Carloads in the second quarter for the company — which owns about four dozen short lines — rose 5.7% compared with the first quarter’s mark.
The commodity “needle movers” in the half were food products, which posted a 27.3% traffic jump, and agricultural products, which registered a 19.2% traffic climb, Watco officials said. However, coal carloads plunged 26.1% and minerals traffic declined 12.5%.
It also was a positive first half for Gulf & Ohio Railways (G&O), which owns four short lines. Collectively, the company’s traffic climbed 6% year over year.
“This was primarily driven by a few spot moves and continued ramping up from one particular customer,” said G&O President and Chief Operating Officer Todd Burchette.
For Genesee & Wyoming Inc. (G&W), first-half carloads fell slightly compared with the same 2024 period.
“This was primarily attributable to the weak start of the year in terms of widespread and significant winter weather, as well as economic and trade uncertainties affecting various industries,” G&W officials said.
The owner of more than 100 regionals and short lines in North America had a weak first quarter but a better second quarter, when traffic rose about 3%, driven by stronger volumes in the automotive, coal, minerals and stone, and waste sectors.
OmniTRAX Inc. — which owns two dozen regionals and short lines — had a trying first half, as well. The company’s carloads dipped about 2% compared with the same 2024 period.
“The decrease was primarily driven by reduced shipments of steel slabs to Mexico, lower originated volumes of frac sand from the Illinois Basin and diminished corn movements from the Great Plains,” said OmniTRAX Director of Market and Yield Management C.J. Talley.
Despite the overall decline, the company did post growth in several key traffic segments.
“Carloadings increased for fuels, asphalt and grain products, as well as miscellaneous transload industrial goods in the Southeast,” said Talley. “Additionally, grain mill product carloadings in the Midwest saw an uptick.”
Regionals rate higher volumes
“An uptick” also characterizes first-half traffic for some regionals. Volume in the period even transcended that description for Iowa Interstate Railroad LLC (IAIS), which notched an overall 12% year-over-year gain in 2025’s first six months. The regional operates more than 500 miles of track in Illinois and Iowa and interchanges with all the Class Is.
Intermodal traffic soared 96%, primarily due to a new service introduced to help an intermodal customer grow, said Carrie Evans, IAIS’ executive vice president and chief commercial officer.
In addition, consumer and other volume jumped 37% because of empty cars moving in and out of storage and linehauls for car cleaning; distillers’ dried grains traffic climbed 19% due to strong ethanol production; and chemicals/haz-mat/plastics carloads rose 17% as demand remained strong.
“Overall, we had a great first half,” said Evans. “Ethanol was up with strong production levels, however we have seen some degradation of traffic to competing lines.”
What wasn’t so great for IAIS was flat grain volume and the following carload declines in the first half: aggregates/coal (-36%), metals/machinery (-18%), forest products (-13%) and agricultural products (-1%).
“On the grain side, wheat was up with strong demand while soybeans lagged behind last year’s volume with an abundant truck supply in our service territory,” said Evans. “Metals was down because of soft demand for ag machinery [and] aggregates were down due to weather delays for construction projects in Iowa and Illinois.”
It also was a banner first half for Red River Valley & Western Railroad Co. (RRVW), which operates more than 500 miles of track in the southeast quarter of North Dakota and interchanges with several Class Is. Overall, the regional’s carloads shot up 22% year over year.
“The carload growth was primarily driven by a new soybean processing customer that came online in the fourth quarter of 2024 and increased grain volumes,” said RRVW President Victor Meyers. “Grain carloads were up 31%, with strong shuttle movements of corn to the Pacific Northwest for export and increased grain movements into online agriculture processors.”
Mixed bag for short lines at halfway point
However, the period wasn’t kind at all for RRVW sister railroad Twin Cities & Western Railroad Co. (TCWR), Minnesota’s largest short line that operates 360 miles of track in both Minnesota and South Dakota. TCWR’s first-half carloads tumbled 17% primarily because grain volume plummeted 26%.
“Grain prices from RRVW origins have been cheaper than grain prices from TCWR origins, so we are seeing much stronger grain volumes from RRVW when compared to TCWR,” said Meyers, who also serves as TCWR’s president. “The majority of our grain origination from both railroads has moved west for export to Asia, but we believe that this could slow down in the third quarter as Brazil appears to have a large safrinha [corn] crop.”
TCWR noted strong domestic grain demand in 2024’s first three quarters, but increased grain production from the 2024 harvest in states south of Minnesota are currently fulfilling demand that the short line’s customers supplied last year, which is decreasing grain originations on the railroad, he added.
Sugar volume also was problematic in the half, falling 38%.
“The reduction was driven by low sugar beet production from the 2024 crop in Minnesota, which has decreased overall sugar production,” said Meyers.
It also was a tough first half for Conrail, a switching and terminal railroad operating in specific shared-asset areas for its owners CSX and Norfolk Southern Railway. The railroad’s overall volume dropped about 3% despite a slight traffic uptick in June, said Conrail President and Chief Operating Officer Brian Gorton.
“It’s still pretty stagnant in the intermodal market,” he said.
The small volume increase in June was driven by the auto network, with finished vehicle moves just ahead of auto parts traffic, said Gorton.
Count Seminole Gulf Railway among the short lines that had a difficult first half. The more than 100-mile Florida short line’s traffic declined 4.4% year over year.
But the volume decrease was expected, said Seminole Gulf Railway EVP Robert Fay.
“We had a large multi-year aggregates project come to an end in February, so there was a known drop coming,” he said. “Without that project customer, all other traffic was up 14.6%.”
New Orleans Public Belt Railroad (NOPB) officials expected a carload drop in the first half, as well. The short line’s volume declined year over year primarily because CSX and Canadian Pacific Kansas City completed their new interchange in Myrtlewood, Alabama, in December 2024 as part of the Meridian and Bigbee Railroad LLC initiative that was unveiled several years ago.
The new CPKC-CSX route via Myrtlewood is 158 miles shorter than using the New Orleans gateway. The direct interchange eliminates the “middleman” roles previously played by NOPB and Union Pacific Railroad, which had bridged CSX-CPKC traffic between New Orleans and Laredo, Texas.
“Following the opening of the new rail interchange in December, rail traffic north of Baton Rouge started going through the new interchange. [Previously] that traffic would go through the New Orleans gateway,” said NOPB spokesperson Kimberly Curth.
For the Chicago South Shore & South Bend Railroad (CSS), first-half volume at least matched last year’s level. Owned by Anacostia Rail Holdings, CSS operates more than 100 miles of track and interchanges with every Class I and short line in the Chicago rail hub.
“We were flat overall. Steel was good the first four months of year, but then dipped in May and June,” said CSS President Todd Bjornstad. “That balanced us to flat status.”
The first-half traffic outcome was much better for Farmrail System Inc., which serves as a lessee-operator for the Oklahoma Department of Transportation’s 82-mile line between Weatherford and Erick and 89-mile line between Westhom and Elmer; manages affiliate Grainbelt Corp. that operates 178 miles of track between Enid and Frederick; and retains a joint-venture interest in Finger Lakes Railway Corp.
Farmrail’s carloads reached 4,899 units compared with 3,509 units in first-half 2024, said Laci Bryant, the company’s assistant commercial manager. On a year-over-year basis, aggregate traffic rose from 1,000 to 1,108 carloads and chemical traffic climbed from 549 to 661 carloads.
However, petroleum traffic plummeted from 1,200 to 287 carloads; farm and food traffic tumbled from 875 to 483 carloads; and grain traffic fell from 1,180 to 946 carloads, said Bryant.
Sierra Northern Railway notched a first-half traffic gain, too. The short line operates about 100 miles of track in northern California and interchanges with BNSF Railway Co. and Union Pacific Railroad.
“While there is no one driving factor, we saw a 5% increase over last year for the first six months of the year,” said Sierra Northern Railway President and CEO Kennan Beard. “There was a threat of some disruption in grain movements earlier this year due to tariff speculation, but as of now we are business as usual.”