Executive Vice President and Chief Marketing Officer at Norfolk Southern
Thank you, Paul. It's great to have you with us, and good morning to everyone. Let's review our results for the fourth quarter, starting on Slide 11. Overall, revenue grew 13% year-over-year to $3.2 billion, with higher revenue from fuel surcharge and price improvements more than offsetting a 1% decline in volume. The pricing environment remains strong and we capitalize by delivering our 24th consecutive quarter of year-over-year RPU less fuel growth in intermodal and our 30th out of 31 quarters in merchandise.
Speaking of merchandise, Volumes recovered to prior year levels as service improved in the fourth quarter, enhancing our ability to drive value for our customers. Our largest gains were in the sand and proppants market to support the recent surge in demand for natural gas production followed by corn and soybeans also driven by exceptionally high demand. We saw declines in our steel and automotive markets where equipment availability was particularly challenged.
As Paul highlighted earlier, we are making meaningful progress on improving car velocity in our merchandise fleets, and we started to see the results of that increased velocity toward the end of the quarter. Merchandise revenue increased 12% year-over-year to $1.9 billion and revenue per unit, excluding fuel, reached a record level from price gains and positive mix.
Shifting to Intermodal. Total revenue improved 10% year-over-year as higher revenue from fuel surcharge and price gains more than offset a 4% decline in volume. The volume decline was concentrated within our domestic lines of business where headwinds from a loosening truck market and higher inventories heading into the holiday season negatively impacted demand. Conversely, our international lines of business grew in the fourth quarter. Our international intermodal volume rose 5% year-over-year as several of our customers shifted back to inland point intermodal services amid lower ocean rates and easing supply chain congestion. Total intermodal revenue per unit and revenue per unit, excluding fuel, were up year-over-year on higher fuel revenue and price gains.
If we turn to coal, our results for the quarter reflect both our success in capturing upside revenue potential from the market dynamics as well as our ability to create capacity for growth through improved service. Coal revenue for the quarter increased 28%, driven by price gains, volume growth, higher revenue from fuel surcharge and liquidated damages from prior volume shortfalls. Both revenue per unit and revenue per unit, excluding fuel, reached record levels, reflecting the value of our market-based pricing approach in these volatile energy markets.
We were able to leverage increased equipment availability from improved cycle times to capture more utility coal business, which led to 9% volume gain in utility coal in the fourth quarter. Our export coal markets also grew due to higher demand driven by geopolitical conflict. Overall, coal volumes increased 8% in the quarter, and this volume growth was partially offset by year-over-year declines in coke shipments resulting from facility closures.
Let's move to Slide 12 for the full year of 2022. Total revenue for the year reached $12.7 billion, a 14% increase from 2021 driven by higher revenue from fuel surcharge and price gains, partially offset by volume declines. We delivered record level total revenue and revenue less fuel, revenue per unit and revenue per unit, excluding fuel, despite 3% decline in total volume. Volume headwinds were strongest in our intermodal franchise, where a weakening truck market and supply chain congestion led to declines in annual volume.
We saw growth in our coal business as a strong export market and a strong global market for energy increased volumes for coal on NS. Our performance as the year progressed into 2022 provides evidence that our recovering service product is providing momentum to the commercial side of our business. We're working together internally to enhance our offerings in the marketplace and to ensure that we are delivering the value our customers need to be successful.
Lastly, if you will join me on Slide 13, our outlook for 2023 is cautiously optimistic amid uncertainty in the macroeconomic environment and some signals of a slowdown in activity. Our improving service levels will drive opportunities for modal conversion from truck and increase our capacity to address unmet demand. At the same time, economic conditions could be a headwind to volume. At least in the near term, while lower fuel prices and accessorial revenues will temper our revenue per unit.
Within merchandise, we anticipate that macroeconomic conditions will pressure a variety of the markets that we participate in. We're mindful of recent weakness in industrial production, particularly with respect to manufacturing, and that drives many of our markets. Current forecast for manufacturing in the U.S. shows contraction in 2023 as businesses right-size inventories to demand. Additionally, the weak housing market will be a headwind to many of our industrial businesses and we expect this weakness to persist in 2023 as the housing market adjusts to higher interest rates. Volumes will also be supported by increased equipment availability and overall network fluidity.
Looking at intermodal, volume growth will be dependent on the macroeconomic environment, although our improving service levels will create capacity for growth. Total revenue will be pressured by lower fuel surcharges and reduced storage revenue as supply chains continue to normalize throughout the year. Household balance sheets are supported by excess savings accumulated during the pandemic and credit remains available for many despite becoming more expensive. And so long as the U.S. consumer remains resilient, we would expect supportive demand for intermodal. Weakness in the truck market at the start of the year, along with housing will be a headwind but we anticipate the truck market to rebalance supply and demand later this year. Our international business will continue to benefit from lower ocean rates and improving supply chain fluidity at inland points, prompting a return of our customers to Inland Point Intermodal.
Turning to coal. The current outlook for the utility and export coal markets supports a flat to modest year-over-year volume improvement. While overall utility demand is likely to remain flat, our capacity to handle more of that demand will increase with efficiency and productivity improvements on our network. For export, Norfolk Southern will benefit from additional coal supply coming online despite softening seaborne prices. We expect the global supply of met coal to continue to be restricted by geopolitical factors which should support demand for U.S.-sourced coal. We will experience tough coal pricing comps in the first half of the year, which will pressure export met ARPUs on a year-over-year basis.
Overall, we are energized by our recent momentum heading into '23, and we are focused on leveraging that momentum to drive value for our customers and grow our business. Uncertainty and downside risks are certainly still present, but we're going to continue to focus on the things that we can control to successfully execute our strategic plan and deliver results for our customers and for our shareholders.
And lastly, I'd like once again to recognize our customers for their partnership throughout 2022 and thank them for their business. We appreciate all of their support as we move forward in 2023 with sustained momentum toward delivering the service product that they need to succeed.
I will now turn it over to Mark for an update on our financial results.