# Coal transport: Unit economics

Why freight can be 40% of what a power plant pays

Source page: https://www.materialinsights.org/energy/e_coal_transport/economics/

What this tab covers What it costs to move a unit of energy this way: capital and operating costs, tariffs, utilisation and how it compares with the alternatives.

Moving coal costs a few dollars per MWh of coal energy for a typical US rail haul, and much less per MWh per 1,000 km by ship. Because coal itself is cheap, transport can be close to half of the delivered price.

#### Key costs

| Measure | Value | Note |
|---|---|---|
| **US average coal transport cost to power plants** | 18.77 USD per short ton^[3](https://www.eia.gov/todayinenergy/detail.php?id=64564) | 2023 nominal; about USD 3 to 4 per MWh of coal energy (calculated, 5.5 to 7 MWh per tonne) |
| **Rail, Northern Appalachia to North Carolina** | 38.00 USD per short ton^[3](https://www.eia.gov/todayinenergy/detail.php?id=64564) | 2023 dollars, up from 31.99 in 2022 |
| **Transport share of delivered coal cost, US** | about 40%^[4](https://www.eia.gov/todayinenergy/detail.php?id=43695) | 2019; about one-third in 2008 |
| **Capesize benchmark, Western Australia to Qingdao** | about 10 USD per tonne^[8](https://www.breakwaveadvisors.com/insights/2026/2/27/panamax-freight-view-on-indonesian-thermal-coal-flows) | Late February 2026, up from about 7.5 in mid-January; about USD 0.25 per MWh per 1,000 km (calculated, about 6,700 km, 6 MWh per tonne) |
| **Capesize time-charter earnings** | 33,484 to 43,086 USD per day^[7](https://www.handybulk.com/baltic-dry-index/2026/july/) | July 2026 |
| **Panamax time-charter earnings** | 17,896 to 20,325 USD per day^[7](https://www.handybulk.com/baltic-dry-index/2026/july/) | July 2026 |

#### Where the money goes

| Item | Share or amount |
|---|---|
| **Rail haul** | the largest part of US delivered cost; 69% of power-sector coal moves partly or wholly by rail^[4](https://www.eia.gov/todayinenergy/detail.php?id=43695) |
| **Short-haul rail and truck** | USD 7.62 to 13.12 per ton by rail (Illinois Basin to Kentucky) and 8.50 to 13.05 by truck (Northern Appalachia to Pennsylvania), 2022-2023^[3](https://www.eia.gov/todayinenergy/detail.php?id=64564) |
| **Ocean freight** | about USD 10 per tonne from Western Australia to China in early 2026^[8](https://www.breakwaveadvisors.com/insights/2026/2/27/panamax-freight-view-on-indonesian-thermal-coal-flows) |

Coal's energy density is about half that of oil per tonne, and it cannot be pumped, so per MWh it costs more to move than oil over land. That is why many power plants were built at the mine mouth and send electricity rather than coal. Ships flatten the cost of distance. Comparisons between US rail and seaborne figures should be read with care: the US average covers all hauls, while the ship benchmark is a specific long route.

#### Sources

1. [Coal transportation costs to the US electric power sector, 2023](https://www.eia.gov/todayinenergy/detail.php?id=64564) US EIA, Today in Energy, 2025
2. [Rail continues to dominate coal shipments to the power sector (2019 data)](https://www.eia.gov/todayinenergy/detail.php?id=43695) US EIA, Today in Energy, 2020
3. [Baltic Dry Index, July 2026](https://www.handybulk.com/baltic-dry-index/2026/july/) HandyBulk, 2026
4. [Panamax freight view on Indonesian thermal coal flows](https://www.breakwaveadvisors.com/insights/2026/2/27/panamax-freight-view-on-indonesian-thermal-coal-flows) Breakwave Advisors, 2026

## Other sections

- [Summary](https://www.materialinsights.org/energy/e_coal_transport/index.md)
- [Overview](https://www.materialinsights.org/energy/e_coal_transport/overview/index.md)
- [Correlation](https://www.materialinsights.org/energy/e_coal_transport/correlation/index.md)
- [How it works](https://www.materialinsights.org/energy/e_coal_transport/explain/index.md)
- [Efficiency and losses](https://www.materialinsights.org/energy/e_coal_transport/efficiency/index.md)
- [Technology advances](https://www.materialinsights.org/energy/e_coal_transport/advances/index.md)
- [Value chain](https://www.materialinsights.org/energy/e_coal_transport/valuechain/index.md)
- [Geopolitics and regulation](https://www.materialinsights.org/energy/e_coal_transport/geopolitics/index.md)
- [Impact on the biosphere](https://www.materialinsights.org/energy/e_coal_transport/biosphere/index.md)
- [Relationships](https://www.materialinsights.org/energy/e_coal_transport/links/index.md)