Omaha, Neb. (AP) – Union Pacific says it will stop imposing temporary limits on shipments to some businesses while it reviews a policy that was criticized by federal regulators and shippers at a hearing last week.
Union Pacific has implemented more than 1,000 of these restrictions this year – significantly more than all other major freight railroads combined – as part of its effort to relieve congestion along the railroad. CEO Lance Fritz said in a brief letter to the US Surface Transportation Board on Friday that UP would block all new restrictions.
These orders, which forced businesses to temporarily limit their shipments and remove some of their railcars from UP’s network, caught the eye of regulators because they’ve been up significantly over the past few years. UP used 140 of them in 2018, according to the STB.
Members of the STB and companies that rely on the railroads to deliver their raw materials and finished products said at a two-day hearing last week that business operations are disrupted and shipping costs rise as companies find more expensive Shipping options may have to be resorted to, such as trucking.
Many businesses are served by only one railroad. Their bulk products may not be suited to being delivered by trucks, so they don’t have many options when Union Pacific borders them.
Typically, railroads use embargoes in extreme circumstances when something beyond their control, such as a flood or bridge fire, hurts their ability to move freight. However, business groups say they believe UP’s deep cuts in its workforce are part of the reason the Omaha, Nebraska-based railroad is having so much trouble meeting customer expectations.
Union Pacific executives argued at the hearing that these temporary limits were needed to help improve the railroad’s performance, but STB President Martin Obermann said they did not significantly help Union Pacific because its performance statistics were not yet available. are also behind where they should be.
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