Dive Brief:
- A congested rail system left eight of Kansas City Southern's (KCS) nine power plant customers with low coal supplies, according to reporting from Platts. KCS CEO David Starling said that if space should open up on trains, deliveries could be set to rebound.
- Revenues from utility coal deliveries declined 4%, Kansas City Southern (KCS) said in its third quarter earnings report, though the company signaled those numbers could rebound in the final quarter.
- Utility coal revenue declined to $58.8 million from $61.2 million in the third quarter of last year. Per-car revenues for coal delivery rose 2% however, to $1,085.
Dive Insight:
Utilities are having a difficult time stocking up on coal this year, in part due to a congested rail system that is also helping move a successful grain crop. Platts reports that during its earnings call with investors, Kansas City Southern said eight of the nine utilities it supplies with coal have low stocks. While that means the transportation holding company's energy revenues declined in the third quarter is also could mean a boost in the waning stages of 2014.
"If rail congestion eases somewhat, coal could be a bit of a wild card and could be stronger than anticipated in the fourth quarter and could impact year-to-date revenues in a positive way," Platts quoted David Starling, the company's president and CEO, saying during the investor call.
