Union Pacific Corp. has settled rail-service lawsuits with Dow Chemical Co. and DuPont Co., and is close to settling a similar suit with Union Carbide Corp.
UP, the nation's largest railroad, settled with Dow July 23, while the DuPont suit was resolved in late June, according to UP spokesman John Bromley.
Improved service played a role in Dow's decision to settle its suit, according to Dow spokeswoman Anne Ainsworth.
``When we filed the suit in March, our rate of on-time deliveries was as low as 10-20 percent,'' she said in a recent telephone interview. ``In the last two weeks, it's been over 90 percent.''
Bromley declined to reveal terms of either settlement. Omaha, Neb.-based UP had taken an after-tax charge of $155 million in the second quarter to cover the costs of customer claims against the railroad, but Bromley would not say if this fund was used in the recent settlements.
UP expects to settle with Carbide as well, but Bromley declined to predict a target date for that settlement.
``These companies are all major players and large customers of ours,'' Bromley said. ``We're very comfortable getting this behind us now.''
Dow, DuPont, Carbide, Phillips Petroleum Co., and a group of UP shareholders each had brought suit against the company after major delays in rail delivery in the wake of UP's 1996 merger with Southern Pacific.
In March, Midland, Mich.-based Dow claimed service disruptions already had cost the firm $25 million. Ainsworth said the company had no updated figure to reflect how much it had lost to date.
UP is the sole rail provider to Dow's two largest chemicals and plastics sites, located in Freeport, Texas, and Plaquemine, La.
DuPont of Wilmington, Del., said it also has seen significant improvement since filing suit against UP in March.
In a prepared statement, Carbide Vice President John Gigerich said UP service has improved to Carbide plants in Texas and Louisiana. Gigerich added that Carbide expects ``a speedy final resolution'' to its lawsuit.
UP has increased its average rail speed to 13.4 mph in recent months, but is striving to match its pre-merger speed of 16.5 mph, Bromley said. Speeds have slowed by recent congestion in its Los Angeles corridor, but rail speed in the plastics-heavy corridor between Texas and the Northeast actually has increased since the merger, he added.
Not all parties involved share UP's optimism. Maureen Healy, transportation director for the Society of the Plastics Industry Inc. in Washington, said improvements in transit times, based on average shipping days, have been minor. The number of days from loaded origin to destination on UP lines is about 13. Before the merger, average transit times were less than 9 days.
Most of Texas' 225 chemicals and plastics firms also are not seeing improvements, according to the Texas Chemical Council.