WASHINGTON — Union Pacific has significantly reduced its use of congestion-related embargoes, which last year drew scrutiny from the Surface Transportation Board and scorn from shippers.
UP dramatically increased its use of embargoes last year, when it issued the vast majority of Class I railroad embargoes in order to prevent its local yards from clogging up. The increase prompted the STB to hold a two-day hearing in December.
With UP running short of train crews, service slowed and customers ordered more freight cars in order to keep their inventory moving. The railroad issued more than 1,000 embargoes in response to congestion last year, compared with just 27 in 2017 — the year before it adopted a lean Precision Scheduled Railroading operating model. The embargoes do not shut down service completely: UP allows shippers to apply for permits to keep some traffic flowing.
“As you are aware, Union Pacific paused its pipeline management embargoes on Dec. 16, 2022, while we assessed the feedback received from our customers and the Surface Transportation Board. During this pause, we evaluated how to incorporate enhancements to our inventory management program,” Brad Moore, UP’s vice president of customer care and support, wrote in an update to regulators this week.
UP has provided customers with improved tools and technology that help them manage their freight car inventory. It also increased the threshold that would trigger an embargo alert.
“Implementation of these enhancements has already yielded positive results, with over a 65% reduction in customer embargoes when comparing January through April year-over-year data. Further, while in 2022 approximately 29% of the customers notified of potential inventory issues ended in embargoes, the various enhancements in 2023 have reduced that embargo number to 14%. Union Pacific is now averaging less than five embargoes a week, in the last eight weeks we have been averaging four per week,” UP said in its update.
New shipment management tools give customers more information, which allows them to more effectively manage their inbound freight cars. They can now see how many cars are in their local serving yard, their average car release rates, and available capacity.
“This data empowers customers to address inventory capacity constraints proactively,” UP said.
In May or June UP will roll out upgrades that will allow customers to receive notifications regarding serving yard capacity.
“Union Pacific’s objective remains the maintenance of a fluid network operating with high levels of consistency and reliability. That objective requires we remain focused on Union Pacific’s five critical resources — our employees, locomotives, freight cars, line of road, and terminals — to ensure goal alignment and sound execution of our transportation plan,” the railroad said. “Customer-centric solutions and implementation enhancements for the embargo process have already yielded positive results, with massive reductions in embargoes year-over-year. Union Pacific has ceased utilizing the pipeline management program and will continue working with its customers to identify continuous improvement and engagement opportunities.”
Sounded about right from a corporate perspective to highlight the good – decreasing embargoes – while not admitting any guilt on their part.
If they were running their railroad the way they used to (pre PSR) customers and shippers would not be keeping surge amount of rail cars to handle the frequent “oopsies” that UP was experiencing in the last two years before they let half their people go (furloughed) and sidelined a quarter to a third of their locomotive fleet. Doesn’t matter if you have cars to move. You have to have locomotives and train crews to move them and a fluid system not choked by over length trains that don’t fit the sidings. Improve that and the embargoes basically go away!
They tell Congress its due to staffing issues, but the sheet above just says “Congestion”. As for the word salad of the press release, its really a way for them to say they will comply without admitting acquiescence to the higher authority of the STB.
In plain english, “we run our railroad the way we run our railroad”.
One never has to go far to learn how much hot air goes into these manicured statements. Anybody can throw percentages around.
Sounds suspiciously self-serving and more complex than necessary for a simple News Release.