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Congestion, delays and erratic service are hitting CSX Corp., one of only two railroad operators that handle nearly all the shipments that move by train east of the Mississippi River. The problems began in May and became much worse this summer, according to customers and weekly performance data reported by the Jacksonville, Fla., company.
It’s a colossal mess for businesses that have spent years streamlining supply chains to run with just-in-time inventories.
Coal producers say their stockpiles are growing because CSX is taking longer than it should to pick up coal-filled railcars from mines in Ohio and West Virginia. Food makers have slowed production in hopes that ingredients such as oils and sweeteners will last until the next delivery. Some companies are trying to avoid the worst bottlenecks in CSX’s system, including by switching to trucks and other railroads.
McDonald’s Corp. has supplemented its regular train shipments of frozen french fries into the Nashville, Tenn., area with truck deliveries, according to a person familiar with the matter. Kellogg Co. has called in truck-hauled tankers of cooking oil to ensure uninterrupted production of Pringles at a Jackson, Tenn., factory, a person familiar with the matter said.
A spokeswoman for McDonald’s said french fry eaters haven’t been affected because “we have contingencies in place to ensure there is no disruption in our supply.” Kellogg didn’t respond to a request for comment.
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