Happy trails have become unhappy rails in the Lone Star state, as an overburdened railroad system is making it more difficult and time-consuming for resin manufacturers to get their product out of the Houston area.
``The plastics industry is a major part of our customer base,'' Union Pacific Railroad spokesman John Bromley said. ``But the industry has produced a lot more product this year. Some areas of our storage and transit system have overflowed and that's forced us to move rail cars to other locations, which has added to the congestion.''
Houston, a major hub for both the plastics and railroad industries, is a complex area with many railroad switching yards and junctions, according to Bromley.
Union Pacific, which controls about 85 percent of Houston rail traffic, estimates about 210,000 railroad cars of plastics moved through the Houston area last year. That number has been increasing at a rate of 5-7 percent in recent years.
Bromley added UP's average rail transport speed has slowed from 19 mph to 15 mph in recent months. An Occidental Chemical Co. official told the Houston Chronicle recently the rail slowdown has increased the out-of-state delivery time for loaded rail cars from seven to eight days to 16-20 days.
Hopper car traffic from one side of the city to the other is on a nine-day pace, according to Maureen Healy, director of federal environmental and transportation issues for the Society of the Plastics Industry Inc. in Washington.
Numerous plastics officials were among the 300 shipping customers who gathered Aug. 29 in Houston to discuss problems on the UP line, which has more than 6,300 miles of tracks in Texas and about 1,500 employees in Houston alone.
The forum, organized by the National Industrial Transportation League, included attendees from Mobil Chemical Co., Fina Oil Co., Union Carbide Corp., BASF Corp., Exxon Chemical Co., Millennium Petrochemicals, Solvay Polymers, Shintech Inc., DuPont Co., Huntsman Corp., Chevron Chemical Co. and Geon Co.
Many delays were traced back to last year's $5.4 billion merger of Union Pacific and Southern Pacific, a deal that was opposed by many shippers throughout Texas who feared it would create a rail monopoly in the region.
Labor agreements needed because of the merger have not been settled, while skilled workers are in short supply in the Houston area, railroad officials said at the meeting. A series of serious service derailments in Texas, including a 33-car derailment between San Antonio and Waelder, Texas, on Aug. 19, also have complicated rail schedules.
The government-mandated sale of a line between New Orleans and Lake Charles, La., to the Burlington Northern-Santa Fe railroad has added to the congestion, since the new owner has closed the line several times for maintenance, UP officials said.
Several resin makers said they have turned to more-expensive truck transport to fulfill obligations to their customers. One industry source estimated bulk truck transport could be twice as expensive as rail transport, while smaller box transport could cost three or four times more via truck.
``Sometimes you can live with [the delays], but sometimes you have to put your product on a truck and get it to your customers or else you'll be shutting your customers' plants down,'' one industry executive said last week.
Industry sources said the rail bottleneck has caused some manufacturers to cut down production rates at several resin plants. No manufacturers contacted confirmed they had taken such action, although one industry executive said his firm has avoided it ``by the skin of our teeth.''
Several resin makers have discussed stopping production completely for a day to help UP get caught up with rail traffic, Healy said, but no such plans have been formally made.
To improve the situation, the railroad plans to add ``command posts'' to micromanage the system, add additional locomotives to the lines and bring in crews from other parts of the system. UP plans to hire 300 new switch operators and 130 engineers by the end of the year.
``We know there have been some serious service problems, but there are no overnight fixes on this,'' Bromley said.
Another industry executive said getting empty rail cars returned to be filled again seems to be a particular problem.
``Cars get lost in the system,'' the executive said. ``I don't know if [the railroad] places more of an emphasis on getting deliveries out or what, but it's taking longer to both get the cars back and get them out of Houston.''
Healy described the rail tie-up as the ``most profound'' traffic situation affecting the plastics industry in her nine years with SPI.
Problems affecting deliveries also are affecting safety. Since January, a dozen UP employees and bystanders have died in eight accidents. This string of fatalities prompted the Federal Railroad Administration to launch an extensive safety review of UP in Houston and 10 other cities Aug. 23. Preliminary safety problems revealed by the FRA include employee fatigue, overworking of managers and employees, insufficient training, dispatching problems and insufficient information on trains that are carrying hazardous materials.
At the Aug. 29 meeting, UP officials admitted the congestion problems probably were related to the safety issues.
Industry estimates claim 75 percent of all resin relies on railroad transport. Rail traffic also accounts for 20 percent of the cost of raw materials.