The cold weather has caused increased congestion across the US rail network as the demand for coal significantly increased.
Atlanta-based Southern Company fuel services vice-president Jeff Wallace was asked if the rail congestion would impact the typical inventory builds in the shoulder season before summer.
"Absolutely,” he told Surface Transportation Board commissioners.
“The only way to [build inventories] is to take some units offline now even though it's not economical.
“Going into peak summer season you have to have inventories at target levels for insurance and reliability reasons.”
Attendees of the Rail Energy Transportation Advisory Committee meeting said the cold forced the railroads to delay trains for various reasons, from operational and safety concerns to the fact that crews couldn't get to work.
The resulting backlog slowed the rail network, especially at important interchanges such as Chicago.
Burlington Northern Santa Fe industrial products VP David Garin said the railroad was ploughing all its resources into easing congestion on its network, particularly in the north where it operated busy lanes that were seeing increased traffic for Bakken crude, a record grain harvest and heightened demand for Powder River Basin coal.
Garin said the railroad was adding staff and locomotives and had increased its spending by nearly 20% from the $5 billion it originally announced in order to add capacity to its northern lines.
