STB extends emergency order in the West

By Staff -- Logistics Management, 1/1/1998

While the Union Pacific insists that it is making progress toward solving major service problems in the West, the federal agency that oversees the railroads has extended its emergency service order through mid-March.

The Surface Transportation Board (STB) first issued the order in October in response to major service failures on the UP and Southern Pacific system, which hit particularly hard in the Houston area. The problems were in large part due to difficulties Union Pacific has had in integrating the SP into its system. The two railroads merged in 1996.

In extending the order, the board said that while service had improved, the recovery was not broad enough. The order permits the Texas Mexican Railway, or "Tex-Mex," to handle traffic on UP and SP lines in Houston. In addition, it ordered UP to release shippers in the Houston area from existing contracts, which would allow them to switch some traffic to the Burlington Northern Santa Fe Railway. To facilitate train movements, it ordered UP to allow BNSF and Tex-Mex representatives to act as observers at UP's Spring, Texas, dispatching facility.

The STB further ordered both the UP and BNSF to establish priorities for grain shipments based on widespread concern among agricultural shippers that substantial amounts of grain on the ground could spoil if they were not moved soon.

For its part, the UP insists that its operations are improving. The railroad says it is operating more efficiently than at any time since mid-summer.

Despite the progress made to date, shippers are by no means satisfied. In testimony before the STB on Dec. 3, Larry Thomas, president of the Society of the Plastics Industry, insisted that service had not improved since the first emergency hearing on Oct. 27.

In fact, Thomas told the board, several shippers continue to report near shut-downs and delays in delivery times. "When it comes to UP rail service," he said, "our industry clearly has a lemon on its hands."