Iowa Public Television


Union Pacific Announces Plans To Limit Service

posted on July 16, 2004

According to the Association of American Railroads, cargo shipments rose 6 percent through June and are headed for a record high this year. But congestion on the lines and a shortage of freight-hauling capacity caused average train speeds to fall by nearly 7 percent during the first half of 2004.

Industry analysts say reductions in personnel and equipment by the major rail carriers are partly to blame. Demand for rail capacity has heated up, and the railroads have been unable to keep pace.

With harvest-time peak volume for rail service just around the corner, the shortages have made some rural customers of the railroads a little edgy. This week's announcement by one major carrier of a further cutback in service underscores the problem.

Union Pacific Announces Plans To Limit Service Union Pacific, the nation's largest railroad, plans to further limit service as it struggles with record demand in an improving economy.

Steps include limiting car loads in the central corridor of Iowa and Illinois, regulating the volume of selected farm commodities and capping the number of incremental train starts.

This is not exactly unexpected news in farm country. Over the years, many railroads have consolidated and either abandoned lines altogether or forced users to change their method of operation.

Frank Huseman, NEW Cooperative, Knierim, Iowa: "The railroads, like everything else, are demanding faster loading, quicker service. They came to us and they say, 'We'll service you but you're going to do it on our terms. In order for us to be efficient and make you more efficient this is the requirements that we'd like to see you do.'."

What the NEW Cooperative in north central Iowa did, was invest over one million dollars to build this load-out facility ... which can accommodate a unit train. The coop hauls between 200 and 300 truckloads of grain a day from its outlying facilities and can have 110 cars loaded with 440,000 bushels within ten hours.

In return for the coop's new "efficiency", it gets compensated with a better freight rate from it's carrier, the Illinois Central railroad ... and so far its been getting the cars it needs when it want them.

This is far from routine, as the load out facility is less than a year old. But the regional manager of the coop said it was just a matter of time before such a facility was built ... as the shipping trend already was in motion.

Frank Huseman, NEW Cooperative, Knierim, Iowa: "We've seen this start up in North Dakota probably five years ago. The Burlington Northern Line, there was a lot of 110s up there but we've seen it progress to the other lines and everyone that wants to be in the grain shipping business, they will be upgrading to these levels otherwise the service won't be there."

Tags: agriculture crops news trains transportation