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Railroad Woes: Union Pacific Routes Clogged in West by Mark Engler, Freelance Writer Capital Press, April 16, 2004

Personnel and equipment shortages at Union Pacific Railroad are slowing freight travel throughout much of the western United States this spring.

All the major commodities the railroad moves are being affected, including Northwestern timber and ag products, UP spokesman John Bromley said in an interview this week.

Although the most severe slowdowns are occurring in the southwestern United States where large volumes of international goods coming in through ports at Long Beach and Los Angeles are backing up traffic throughout California, Arizona, New Mexico and Texas, Bromley said “episodic” shortages of engines and crews in the Pacific Northwest “have affected all of our shippers there” as well.

The railroad blames the backlogs on an unforeseen upsurge in the economy in 2003, coupled with an exodus of early retirees that caught the company unprepared.

In addition, stormy winter weather in the Northwest had a cascading effect that only added to UP’s woes.

“All that is gone now, of course, but we’re still trying to handle big volumes of freight with a pretty tight crew base,” he said. Bromley acknowledges that Union Pacific was “caught short” both in terms of predicting the need for crews and forecasting the economy.

Currently, Union Pacific is embarking upon “the most aggressive hiring program under way in memory,” seeking to add some 4,200 additional employees in 2004 on top of 2,400 new hires in 2003, he said.

Also, the railroad is “acquiring locomotives right now” at about 10 a week — which is about all the primary North American locomotive manufacturers, General Motors and General Electric, can muster, said Bromley.

But Union Pacific isn’t likely scoring sympathy points with customers inconvenienced by the latest turn of events. For some time now, shippers and logistics specialists across the country have been complaining about what they regard as a general air of unresponsiveness on the part of major railroads when it comes to satisfying the demands of their customers.

Says Sam Henzel, co-owner of Tri-Cord Elevators in Southern Oregon: “There’s nothing good that I can say about the Union Pacific railroad. Maybe someday the government will break them up into more than one company; that’s the best thing that could happen to them.” Henzel is fed up with what he sees as UP’s monopolist arrogance. Earlier this month he got word from company officials that the railroad couldn’t spare any railcars during April for shipping grain from Henzel’s local operation in Worden, Ore., to his primary customers in Central California.

“I look out the window every day and see hundreds of Canadian cars go by, just not very many American cars,” he said. “They’ve got no problem handling those Canadian cars because that’s a long shipment, and the railroads just love those long shipments.”

But when UP finds itself in a pinch due to poor planning — like now — Henzel said the first group they pick on and leave out in the cold are the small guys like him.

“It’s all in keeping with the Golden Rule at Union Pacific,” said Henzel. “The man with the gold makes the rules. ... Whatever the railroad wants to do, the railroad does, and we’re just at their mercy.”

Henzel said his only option at this point is to buy grain from somewhere in the Midwest and have it shipped to customers in California.

“Not only do I not get to ship my grain, but I have to buy somebody else’s grain from somewhere else and ship theirs instead,” he said.

Gretchen Borck, director of issues for the Washington Association of Wheat Growers, said she hears complaints like Henzel’s all too often. To some extent shortage of crews and cars is a “fact of life” with any railroad, but there is indeed a palpable level of frustration with the status quo among her association’s members, she said.

The Washington Association of Wheat Growers and a number of other ag-producer groups across the region and the country are throwing their support behind the U.S. Railroad Competition Act of 2003 currently under debate in Washington, D.C. Sponsors in Congress say the measure – called a “re-regulation” bill by its opponents — would “promote reasonable rates in the absence of effective competition;” require consistent and efficient rail service for shippers, “including the timely provision of rail cars requested by shippers” even for smaller customers.

“We’re really wanting to get more lines out here to compete with one another,” said Borck.

Ultimately, competition is indeed the only thing that’s going to solve whatever problems exist, said Oregon Department of Agriculture transportation specialist John Kratochvil.

But that competition needs to come not just from other rail lines, but also from other modes of transportation, said Kratochvil, who’s soon due to finish an extensive report on the merits of inland and coastal waterway navigation and freight transport in the Northwest.

“What we want to do is better utilize the inland and coastal waterways to provide a better balance (between both rail and trucks),” said Kratochvil. “On the Columbia and Snake rivers, if we did not have barging we would be very much out of position as far as being competitive in the world of agriculture products.

“From our standpoint, it is essential that barging on the Columbia system (be improved) and provide real competition to rail.”