(The following report appeared on The Advocate website on March 29.)
BATON ROUGE, La. — Louisiana’s chemical industry stands to benefit from two railroads’ decision to provide a more direct route for traffic between the Gulf Coast and the Northeast, an industry spokesman said Tuesday.
“It looks good, and obviously both companies operate in Louisiana. Hopefully there will be a positive effect on the industry down here,” said Edward Flynn, Louisiana Chemical Association director of health and safety and security affairs.
Under the agreement signed Monday, Norfolk Southern Railway and Canadian National Railway will work together to reduce congestion in Chicago by streamlining their exchange of rail traffic at major gateways. For Louisiana’s chemical plants, that means traffic on Norfolk Southern’s rails will go through New Orleans or Memphis.
“With the demand for freight rail service increasing at historic levels throughout North America, this is a creative way of expanding network capacity and enhancing the service options available to our joint customers,” Donald Seale, Norfolk Southern’s executive vice president, said in a statement.
The new routing protocol, which will be implemented over the next three months, is designed to improve network capacity, transit times and asset utilization.
If the railroads can work together to do all those things, it would be very helpful for the chemical industry, Flynn said.
Louisiana’s railroads suffer from congestion, Flynn said. There are problems from New Orleans to Lake Charles with delays and bottlenecked lines; there are delays in moving rail cars from one side of New Orleans to the other.
However, Louisiana’s situation has been something of an afterthought, Flynn said. Most of the media attention has been focused on Houston because of the size of the crisis there.
The rail problems peaked in 1997-98, after Union Pacific merged with Southern Pacific. The gridlock clogged California ports with cargo, stranded Midwest grain harvests and idled Gulf Coast petrochemical plants. Some plants resorted to sending products by truck. Estimates put the cost to the U.S. economy back then as high as $4 billion. A half-dozen chemical companies sued Union Pacific over the business losses.Although those delays are a thing of the past, rail transportation could still use a lot of improvement, Flynn said. One of the Louisiana chemical industry’s major concerns remains rail service.
Many of the plants here are “captive,” served by only one line, Flynn said. The lack of competition means that many times the plants must pay higher prices for rail transportation.
Norfolk Southern Railway, a subsidiary of Norfolk Southern Corp., operates 21,300 route miles in 22 states, the District of Columbia and Ontario, Canada. Canadian National, merged with Illinois Central in 1998. It spans Canada and middle America to the Gulf of Mexico.