Rail congestion in regions such as Chicago and Houston may have eased for now, but the railroads will still need to find ways to increase capacity at those busy city locations as the U.S. population grows, Class I railroad executives said at an investor conference this week.
“You’re still going to need additional capacity. You’re only going to wring so much out of Chicago,” said Canadian Pacific (NYSE: CP) chief executive Keith Creel at an investor conference sponsored by Bank of America Merrill Lynch on May 14. Houston is another area that sees a lot of rail activity because of its port and access to Kansas City Southern (NYSE: KSU), BNSF (NYSE: BRK) and Union Pacific.
Because Houston can get congested, KSU has had to resort to staging trains in Laredo, Texas, or Shreveport, Louisiana, according to Sameh Fahmy, KSU executive vice president for PSR. Congestion was so bad around Houston from around March 15 to late April, according to Fahmy, that KSU went to the dispatch center in Houston and worked with UNP to watch trains being dispatched for two days in April.