WASHINGTON — In a bid to ease rail congestion in Texas, a coalition of plastics and chemical trade groups, state rail regulators and two railroads wants to force Union Pacific to sell part of its network and restore third-party switching in Houston.
The Society of the Plastics Industry Inc., the Chemical Manufacturers Association and two railroads that estimate they each would make more than $50 million from the divestiture — Texas Mexican Railway and Kansas City Southern Railway Co. — told the Surface Transportation Board on July 8 that their plan would inject competition in a market where Union Pacific Railroad Co. has more than 80 percent of traffic headed east, south and to the Midwest.
Union Pacific called such attempts ``opportunistic grabs'' that will impede its recovery from service problems. UP said it plans to spend $600 million in the next five years on infrastructure improvements in Houston. Service from Texas eastward is improving, while congestion remains in Nebraska, Kansas and other parts of UP's central region, it said.
A July 1 UP report on the merger said UP rates for Gulf Coast plastics dropped for the second year in a row, and included an Exxon statement expressing satisfaction with competition provided by the merger.
But any improvements in transit times have been minor and are still three times worse than before the merger, said Maureen Healey, SPI director of transportation issues. Most of the 225 chemical and plastics firms in Texas are not seeing improvements, according to the Texas Chemical Council, which is part of the coalition.
The coalition, which includes the Texas Rail Commission, recommended that the Tex Mex railroad keep trackage rights under STB's emergency orders, and that UP should be forced to sell a rail yard to Tex Mex. It said neutral switching should be restored in Houston under the Port Terminal Railway Authority, and other neutral switching and dispatching should be expanded.
STB is not likely to make a decision until after September hearings. The Texas Rail Commission, which opposed the merger, said it expects service to get worse since August is the heaviest shipping month.