Claude E. "Ed" Elkins
Executive Vice President and Chief Marketing Officer at Norfolk Southern
Thanks, Paul, and good morning to everybody on the call. Beginning on slide 19, I'll review our commercial results for the quarter. Now as we expected, the second quarter came with challenges related to ongoing soft freight demand, lower commodity prices and still recovering service levels. In total, we generated just under $3 billion in revenue for the quarter, down 8% from the second quarter of last year and that's driven by a 6% drop in volume and lower revenue from fuel and accessorials.
ARPU was also down year-over-year. However, revenue per unit less fuel improved 1% reflecting gains in price and favorable mix, and that's driven by tempered demand for intermodal and utility coal. I'd like to note here that underneath this favorable overall mix narrative, there was significant negative mix within markets that tempered overall revenue per unit performance, which I'll note below.
Now merchandise results were varied as favorable conditions in the markets for automotive and agriculture products were offset by headwinds in chemicals markets. And that's a good example of the challenging RPU mix within markets that I just mentioned. Automotive volumes were driven by robust finished vehicle production and agriculture shipments were strong due to new lane offerings and a weak local crop in the Southeast. Offsetting this growth was weakness in several of our chemical commodities as well as challenges to meet customer demand in key markets such as metals, aggregates and finished vehicles. Taken together, total merchandise volume and revenue for the second quarter came in 1% below prior year levels.
Revenue per unit was flat year-over-year, but RPU less fuel grew 2%, which makes 32 out of the last 33 quarters that we've achieved growth in this metric. And I think that is a clear signal that our diverse portfolio and strong pricing discipline are delivering results. Turning to Intermodal. Continued market headwinds were felt the strongest in our domestic lines of business where volumes declined 14% year-over-year as weak freight demand, high inventories and excess truck capacity weighed on performance.
Conversely, in a continuation of the first quarter trend, international volumes increased 1% year-over-year and 5.8% sequentially over last quarter. As we guided to before, our customers have continued to shift highway freight back into IPI services and storage charges have declined as supply chain fluidity and container dwell have returned to pre-pandemic normalcy. As you would expect with this performance, Intermodal is another segment where ARPU mix with end markets was challenging for us. Both RPU and RPU less fuel were down significantly due to lower revenue from fuel surcharge and storage charges.
Lastly, coal volume was flat year-over-year, but coal revenue fell 4% as RPU declined. Utility volumes were down 17% year-over-year due to historically low natural gas prices and elevated stockpiles. These declines were offset by gains in export shipments as a result of increased production and robust overseas demand. Although export volumes increased, the mix between export steam and export metallurgical coal shifted unfavorably and comparatively lower seaborne coal prices yielded lower revenue per unit. Again, a key segment where ARPU mix within markets was a headwind. With that, let's turn to Slide 20 and review our outlook for the remainder of 2023.
Overall, we're confident that our service product positions us to realize growth when market conditions improve. And as the year progresses, we are focused on pursuing the opportunities in markets that have the highest potential for growth for Norfolk Southern. We expect to increase our share in these markets as an improving service product and a sharply focused organization allows us to realize more of the ongoing demand for our services. Beginning with merchandise markets, conditions vary by individual market, and we see strong levels of nonresidential construction as reshoring and infrastructure projects increase which will drive strength in metals and construction volume.
Pent-up demand for U.S. light vehicles will continue to support metals and automotive volumes. However, we expect continued weakness in our chemicals markets in the second half. Turning to Intermodal. We expect international volumes to continue its growth trend with an expected rebound in import volumes and the continued share growth of IPI. Storage charges will continue to be a revenue and RPU headwind compared to last year. On the domestic side, overall growth will be dependent on the U.S. consumer, retail inventory levels and the truck market.
We worked really hard with our best-in-class channel partners to sustain our service levels throughout the quarter during the crucial climax of bid season, and we're hearing from our key partners that our strategy is helping them increase their share of bid wins. We look forward to leveraging our capacity to realize this growth as market conditions improve. And finally, within our coal markets, we expect overall volume growth as continued strength in export markets more than offset weakness in utility coal. Coal production levels at NS-served mines will drive growth in export shipments, although we do expect lower seaborne coal prices to negatively impact RPU.
The utility outlook is largely dependent on the weather, on existing stockpiles and natural gas prices. The net result is we expect total coal RPU to sequentially decline by a low double-digit percentage. Despite uncertainty across the economy, our focus on service, productivity and growth remains at the core of our strategy, and we're confident in our ability to grow our franchise and deliver value for our customers. On that note, I'd like to draw your attention to slide 21, which highlights the strength of Norfolk Southern's network and our ability to drive growth both now and in the future.
The ecosystem for electric vehicles has been steadily developing in recent years as demonstrated by last quarter's announcement of the new Scout Motors plant on Norfolk Southern. We are focused on all facets of this emerging EV supply chain, including the EV battery and battery components. Over the last 18 months, more than $70 billion in new investment has been announced for building out EV battery manufacturing plants across North America.
Our commercial team has worked to help locate nearly 1/3 of that investment on our network, including most recently in the second quarter, a new $3 billion General Motors and Samsung battery manufacturing plant in Indiana, on a Norfolk Southern main line. Norfolk Southern's network is well positioned for future industrial development. We reached 60% of the U.S. population and cover 50% of our manufacturing base. We look forward to amplifying that strength through continued industrial development wins. Year-to-date, our industrial development team has reported $2.6 billion in industry investment that's been completed along Norfolk Southern lines, bringing 3,200 new jobs to the local communities that we serve.
We continue to invest in site readiness for our highest potential industrial sites, and we're confident our diverse portfolio of shovel-ready sites combined with the strength of our network, we'll continue to land new opportunities across our network. With that, I'll turn it back over to Alan to bring us home.
