Tue, January 16, 2018 9:01 am

We have heard from market sources that January is shaping up to be a tough month as some US Coalcos are facing difficulties getting enough railcars to move export coal shipments.  The central problem is the weather which caused frozen coal in the railcars.  The extreme cold means it takes extra time to pull trains through the thaw sheds.  Also, we have heard unconfirmed reports that some of the coal may not have been adequately freeze-proofed as some of the coal was loaded well in advance of the cold snap. Norfolk Southern (NS) may have upwards of 12 trains sitting at Pier 6 frozen and, with temperatures below freezing again this past weekend, further problems could arise. A force majeure was declared at Dominion Terminal Associates in Newport News on Jan. 3 and Norfolk Southern Pier 6 in Norfolk on Dec. 28. To date, neither of the facilities have lifted their force majeure declaration. Load rates at NS have dropped drastically recently ranging from 3-10K MT/day (vs 3K MT/hr typically). DTA has experienced minor delays and Pier IX in Newport News has not yet declared a force majeure but has had slower loading rates than normal. The issue of frozen coal is not limited to the export piers either. Looking at the railroad data for the week ending Jan 3 (pre “bomb cyclone”):

  • CAPP: CSX loads down roughly 100k (-19%) from prior week. NS loads down 160k (-48%)
  • NAPP: CSX loads down 170k (-47%), NS loads down 200k (-52%)
  • ILB: CN loads down 31k (-24%), CSX loads down 160k (-47%), NS loads down 86k (-49%)
  • PRB: BNSF loads down 1.2 mm tons (-27%), UP loads down 262k (-14%)