The Union Pacific Railroad took a step toward untangling rail congestion last week when it released a service recovery plan aimed at eliminating tie-ups that have plagued resin deliveries in the Houston area and across the country.
But two major trade groups —the Society of the Plastics Industry Inc. and the Chemical Manufacturers Association — aren't satisfied with the railroad's plan and are continuing to call on the U.S. Surface Transportation Board to get involved.
SPI President Larry Thomas has also called for congressional oversight hearings into the issue in an Oct. 3 letter to Rep. Bud Shuster, R-Pa., chairman of the House Transportation and Infrastructure Committee. In the letter, Thomas said UP's struggles ``could lead to a transportation crisis with serious national economic consequences.''
Although Thomas acknowledged STB had scheduled an Oct. 27 hearing on the issue, he added in his letter that ``the inexcusable delay and amazing lack of urgency in addressing this issue demonstrates that congressional intervention is also required.''
UP controls about 85 percent of rail traffic in Houston, which is a major hub for both the plastics and railroad industries.
UP estimates that about 210,000 rail cars of plastics moved through Houston last year, with that number climbing 5-7 percent annually.
Complications surrounding last year's $5.4 billion merger of UP and Southern Pacific have increased out-of-state travel time from Houston from seven to eight days to 16-20 days. A CMA survey claimed the disruptions have already cost chemical manufacturers more than $100 million and that monthly losses are about $36 million.
The delays have caused resin makers to turn to more costly truck transportation, and some have even curtailed production until the delivery system is improved.
UP's recovery plan calls for diverting traffic to other railroads as well as lightly used lines in the UP system, and for rerouting trains around congested terminals to create additional track capacity at major yards in Texas, California and Nebraska.
Railroads that will pick up excess UP traffic include Burlington Northern-Santa Fe, Illinois Central and Kansas City Southern.
The railroad also will reposition up to 600 locomotives by operating fewer trains and consolidating shorter trains in an attempt to free up locomotives to untangle the traffic.
According to railroad officials, service in its Southern Corridor — which runs from Memphis and New Orleans through Texas and into southern California — should be back to normal within 60-90 days.
UP spokesman John Bromley called his company's effort ``a no-holds-barred plan.''
``Giving away traffic to competitors is unheard of,'' Bromley said in an Oct. 2 telephone interview from UP's Omaha, Neb., headquarters. ``And in a perfect world, you don't want to add to your costs by using your smaller lines like this, but we need to eat the costs and maintain service as soon as possible.''
Bromley also doubted government intervention would remedy the situation, claiming a government takeover of the railroads during World War I ``almost wrecked the industry.''
``We're doing anything we possibly can in order to fix the situation,'' he said. ``What the government can do better remains to be seen.''
SPI communications director Jack LaCovey countered STB needs to get involved because it approved the UP-SP merger.
``STB must have felt Union Pacific was up to the task of bringing the two railroads together and bringing about improvements in service and economies,'' LaCovey said. ``It's too early to tell with the economies, but something went wrong in the improvement of service.''
Based on such suggestions as sailing shipments from Los Angeles to Savannah, Ga., through the Panama Canal to alleviate rail traffic, LaCovey said it appeared as if UP ``is floundering for a solution.''
LaCovey added he doubted UP's time line to improve service because the company has not met previous service commitments.
STB spokesman Dennis Watson said the agency, which was spun off from the defunct Interstate Commerce Commission in 1996, had no comment on the possibility of becoming involved in the UP situation.
STB is separately reviewing comments filed by industry officials on the effects of the merger to determine if further action is needed, Watson said. Federal law allows STB to take over rail shipping for up to 30 days in emergency situations in which a rail carrier cannot transport traffic in a manner that properly serves the public.