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Midwest flooding continues to affect coal barge, rail traffic months later

Roughly five months after the so-called bomb cyclone pummeled the Rockies with snow and the Midwest with rain, railroads and barge companies that carry coal are still dealing with impacts from the historic flooding.

Speaking before the American Coal Council's Coal Market Strategies 2019 conference on Aug. 13 in Utah, Chuck Arnold, senior vice president of dry cargo for Ingram Barge Co., said one part of the system or the other saw high water from Christmastime until about two weeks ago. His company usually prepares to move fleets up the Mississippi River around March 22 on an average year, he said. But the rain delayed that process this year until late June, which was "pretty unprecedented for our industry."

"We've dealt with weather before and you go through it for maybe a month and a half or a couple of months and you get through it and you get your customers satisfied," he said. "What's different about this one is it's been so doggone prolonged."

SNL Image

Flooding near the Platte River in Plattsmouth, Neb., south of Omaha, on March 20, 2019.
Source: DroneBase via Associated Press

"It's kind of one of those things, you know, you don't know where it is until you hit it," Arnold said in an interview. "We're Lewis and Clark in a lot of areas right now." Water levels have receded, but the larger problem barges now face is navigating channels that have changed since the floods washed farmland and runoff downstream, he said. Companies may face delays while waiting for areas to be dredged.

He expects that coal traffic moving down the Mississippi River should normalize in the third quarter assuming there is not too much rain. The velocity of the system is a bit slower currently, but barge companies are working to restore normal velocity.

"The outlook right now is that it should be back to normal after a month or so," Arnold said.

There is still high and swift-moving water at the Port of New Orleans that increases the time it takes to load a ship for export, said Andy Blumenfeld, head of market analytics for Doyle Trading Consultants, a division of IHS Markit. Having recently visited SunCoke Energy Inc.'s Convent Marine Terminal in Louisiana, Blumenfeld said he expects the residual effects of the flooding to continue for another few weeks, noting that water levels are dropping.

Jennifer Sackson, assistant vice president of coal marketing for BNSF Railway Co., told attendees that the company had outages at subdivisions across its network for about four months. Service to parts of the network has not quite reached full capacity, and a small portion of its traffic is still being rerouted.

"With such a large portion of our network out of service for such a long period of time, think about that mid-March through the end of July there were portions of our network that were out of service, we continue to recover today," she said.

BNSF expects its coal volume to decline this year as a result, but Sackson noted the potential recovery in 2020 as the railroad seeks to meet customer demand and stockpiles are reduced.