Congestion on railroads that has delayed US grain deliveries may start to ease in 2015 as operators invest more to increase capacity. To address the problems they faced last year, operators are investing about $2 billion a month, according to the Association of Railroads of America.
Companies hired 17 workers last year, 40% more than initial projections. In addition, several companies announced important investments and new hiring plans for this year. "With the increase in locomotives and personnel, I believe that in 2015 we will see some progress in the pain points," said Mark Levin, analyst at BB&T Capital. According to him, the expectation is for significant improvements from the middle of the year.
Grain delivery delays in the northern Midwest began in early 2014, when freezing temperatures forced operators to use smaller, slower trains, even as demand for transport increased due to record harvests. The problems returned with a new record crop in the fall. For now, a moderate winter has helped the sector. In addition, with the decline in oil and natural gas prices, this sector's demand for transport should be lower.
Source: State of S. Paulo
