Weather impacts western rail operations
The Union Pacific Railroad notified customers Monday to expect their cargo to be delayed 48 hours due to strong storms that have produced tornados, high winds and flash flooding in the Midwest.
More rain is expected in the next few days, which could cause further network interruptions.
Rob Knight, chief financial officer for the Omaha, Neb.-based carrier, said at a Bear Stearns transportation investment conference Tuesday that the weather situation will probably impact railcar flows for a couple of weeks as the railroad makes repairs and handles backlogged freight.
Weather has been unkind to western railroads since late March. Significant rain and snowstorms caused coalmines in Wyoming’s Powder River Basin to cut back production because of too much “water in the pit.” Several mines struggled to remove the water, which has temporarily hurt coal volumes and revenue for the UP and the BNSF Railway.
Matt Rose, chairman and chief executive officer of Burlington Northern Santa Fe Corp., said at the Bear Stearns conference that Powder River Basin coal will continue to produce tremendous profits for the railroads and that temporary delays in no way detract from the value of the coal franchise.