CHICAGO/NEW YORK (Reuters) — Canadian rail companies aren’t alone in their difficulties as they try to cope with the extreme weather this winter.
A winter-long traffic jam on American railways is hampering transport of ethanol and other goods, forcing production cuts and ratcheting up prices in supply-deprived regions.
The coldest winter in three decades has stalled locomotives, frozen track switches and delayed crews, causing snarls in Chicago and other major hubs. Deliveries of grain, oil, propane, and natural gas have struggled to keep up.
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East Coast stocks of fuel ethanol fell to their lowest level on record last week, down to 4.6 million barrels from 6.4 million at the same time last year, data from the U.S. Energy Information Administration showed.
Midwest ethanol producers — who often can store no more than 10 days’ worth of production on site — are finding their tanks full as railroad pickups slow.
Brian Cahill, chief executive officer of Southwest Iowa Renewable Energy, which operates a 110 million gallon-per-year ethanol plant in Council Bluffs, Iowa, said his company mitigates the issue by loading unit trains of 80 cars or more. But congestion is still slowing shipments.
A spokeswoman for CSX Corp., which has experienced delays in eastbound deliveries, said the railroad is working to relieve the congestion, but warned that “progress will be somewhat slow.”
BNSF Railway Co., which serves Midwest markets, said it is detouring rail traffic into St. Louis and Memphis for interchange with other railroads that serve the East Coast — an attempt at relieving congestion in Chicago.
