Coal news and updates

CSX continuing to look at coal network cuts, efficiencies

More cuts and changes to improve efficiency are expected to CSX's Central Appalachian coal network, the railroad's chief financial officer said Tuesday.

In a presentation webcast from the Baird's Industrial Conference in Chicago, CFO Frank Lonegro said Jacksonville, Florida-based CSX continues to look at cutting costs related to its slumping coal business, where it expects revenues will decline by about $450 million this year.

"The coal markets will continue to transition in 2016, and we're taking steps to address both the variable as well as the structural costs associated with the coal network," Lonegro said.

CSX began streamlining its CAPP coal rail network in October by reducing train operations at the Erwin, Tennessee, yard and closing mechanical shops in Corbin, Kentucky, used primarily to maintain, inspect and service coal locomotives and rail cars.

Lonegro noted Tuesday the railroad has completed the cuts at both facilities.

Coal traffic through the Erwin yard has fallen 57% in the past 10 years, the railroad said. CAPP-originated coal trains that pass through the yard primarily ship coal to utilities in the southeastern US, while some of the coal moving from the yard heads to ports for export.

"We are focused on further actions that will play out over time such as combining coal trains, consolidating facilities, utilizing alternative routes and consolidating loading points for greater efficiency in the coal franchise," Lonegro said.

Including estimated financial results for year-end 2015, the railroad will post a cumulative loss of $1.3 billion in its coal business since 2011, Lonegro said.

source: http://www.platts.com