Originally created 02/14/98

New plan to unclog rail traffic does little to soothe tensions with shippers



HOUSTON -- After months of complaints from shippers, Union Pacific Corp. and The Burlington Northern and Santa Fe Railway Co. on Friday announced plans aimed at loosening gridlocked Gulf Coast rail routes.

The plan calls for the companies to set up a joint dispatching center for all their train operations in the region. They also will share interests in a 342-mile line between Houston and New Orleans, once owned by Southern Pacific Rail Corp.

The plan was announced the morning the National Industrial Transportation League met to discuss rail problems in the western United States and did little to soothe tensions with shippers and governmental officials.

Both groups blame the railroad giant's clumsy merger with Southern Pacific for continued delays and clogged routes, particularly in Houston, where Union Pacific controls 85 percent of the 200 miles of track.

After six months of emergency strategies to relieve this single gridlock, Union Pacific still hasn't been able to resume normal service for hundreds of rail customers.

Dow Chemical Co., of Midland, Mich. was just one of several companies complaining of a rapid decline in on-time deliveries by train within the last six months.

"I don't know what the problem is ... to get normal service," said Harry Ignatowski, Dow Chemical's transportation manager. "It's very frustrating and we don't seem to see an end in sight."

Ignatowski said Union Pacific is receptive to complaints, but the problem is allowed to continue.

"I think what the story is, it's not improving and it hasn't improved since the beginning of the year," he said. "I think what shippers want is their service back."

Many saw this latest plan as a license to stall.

Currently, the Houston-New Orleans line is divided in two and separately owned by each railroad. UP dispatches and operates the western 148 miles of the track, while BNSF handles the eastern 194 miles. The line was split as part of Union Pacific's 1996 merger with Southern Pacific.

Critics blame that merger for traffic jams on Union Pacific lines and severe delays across the nation.

Union Pacific promised shippers service would be ironed out by September, then Thanksgiving and then Christmas.

On Friday, a beleaguered Richard Davidson, Union Pacific's chairman and chief executive, tried, with much success to assure shippers and government officials that the company hoped to have the logjam and subsequent delays fixed soon.

"Service has truly been aggravated here," he said. "We're guilty of almost everything."

But he asked shippers to bear with the company and while he hesitated to make another estimate when problems should clear, he said the end of the business quarter should see an improvement in service.

"We look forward to the day we can come up here and talk about our good service," Davidson said.

Davidson pointed to how outside problems, caused for instance by El Nino weather patterns, had exacerbated the delays.

"Weather again," muttered one shipper during the group's luncheon. "You never hear truckers complain about the weather."

As companies face more and more delays caused by the rail lines, those who can afford to do so are turning to trucking, which in turn, drives up the cost for shipped products and means more heavy trucks on state highways.

To improve competition and to help with the gridlock, the Texas Railroad Commission and Burlington Northern Santa Fe Railway Co. have suggested asking the federal Surface Transportation Board to reconsider its approval of the Union Pacific-Southern Pacific merger.

The railroad commission last fall called for Union Pacific to sell its Houston-to-Beaumont and Houston-to-Victoria lines to Kansas City Southern to help alleviate the gridlock and promote that competition.

Shippers have long grumbled that the railroad industry, unlike airlines and trucking, is the most monopolistic of all because railroad companies own both the track and the locomotives and the employees who move one onto another. "It would be like having Continental and American bring in their own air traffic controllers," said Tom Kornegay, the Port of Houston Authority's executive director.