Market Overview

Midwest Floods Stymie Rail Operations

Midwest Floods Stymie Rail Operations

BNSF (NYSE: BRK) and Union Pacific (NYSE: UNP) are grappling with the aftermath of the recent historic floods, with both companies scrambling to assess and repair damage as quickly as possible.

BNSF yesterday alerted customers that multiple subdivisions remain out of service in Iowa, Missouri and Nebraska because of high water and track washouts. Service has been restored along lines between Lincoln and Alliance, Nebraska, and Sioux City, Iowa, to Sioux Falls and Aberdeen, South Dakota. However, service still remains offline on other subdivisions near Sioux City and Lincoln and Omaha, Nebraska.

As a result, BNSF warned that "significant delays and extended travel times" could occur throughout the region. The rail company also said it is monitoring areas along the Missouri and Mississippi rivers that are at risk for service outages in the days ahead.

"While many destinations and facilities are still inaccessible, water levels are slowly receding, and crews are working aggressively to clear affected locations and repair damaged track," BNSF said.

Updates on BNSF's outages, embargoed destinations and recovery efforts can be found here.

UNP is also still experiencing delays on subdivisions in Iowa and Nebraska, and embargoes are still in place for some subdivisions. The railroad expects its Omaha and Columbus subdivisions in Nebraska to reopen by the end of this week as flood waters recede. However, the Lincoln subdivision in Nebraska may not reopen until next week while no reopening date has been set yet for the Falls City subdivision between Council Bluffs, Iowa, and Kansas City, Kansas.

Updates on UNP's outages and recovery efforts can be found here.

Both UNP and BNSF said they are working to re-route trains. UNP said re-routed manifest shipments are experiencing delays of 72 to 96 hours.

Meanwhile, the floods' aftermath isn't just affecting the western U.S. railroads. Norfolk Southern (NYSE: NSC) said flooding in Hannibal, Missouri is affecting rail and intermodal service between Decatur, Illinois, and Kansas City, Missouri. As a result, NSC is diverting trains that move between Kansas City and the Northeast through St. Louis. Delays of eight to 12 hours could result, and NSC expects the diversions to happen through next Friday, March 29.

In response to flooding-related damage, the Federal Railroad Administration declared an "emergency event" on March 19, which enables the railroads to ask for waivers on safety regulations.

The regional outages and delays also appear to be taking a hit on rail volumes. Investment firm Susquehanna Financial Group yesterday estimated that weekly rail volumes originating or starting out of the western U.S. were 12.5 percent lower for the week ending March 16 compared with the same period a year ago. In contrast, rail volumes originating from the eastern U.S. were 2.2 percent higher.

Meanwhile, total U.S. rail volumes for the same week are down 8.8 percent at 240,317 carloads, according to the Association of American Railroads. Of that, grain carloads are 21.7 percent lower, at 18,619 carloads, and coal carloads are down 16 percent, at 72,190 carloads.

U.S. grain carloads and coal carloads represented 7.7 percent and 30 percent, respectively, of total U.S. carload traffic this week.

Image sourced from Pixabay

Want more content like this? Click here to Subscribe


Posted-In: flooding Freight Freightwaves Logistics RailroadsNews Markets General


Related Articles (NSC + BRK)

View Comments and Join the Discussion!

Africa Symposium To Assess Socio-Economic Impact Of Hemp Cultivation In Region

Weekly Market Update: Volumes, Prices Largely Sideways