Rail congestion gives Houston headaches

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Rail congestion gives Houston headaches

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Rail congestion gives Houston headaches
HOUSTON - U.S. railroads carried more freight last week than ever before, but in Houston most of it was moving at a crawl, according to the Houston Chronicle.
Big shippers in Houston continue to be frustrated by congestion on the Union Pacific Railroad, which has been a point of contention all year.

At Lyondell Chemical Co. the impact is being felt especially in its polymers business, said David Harpole, manager of public affairs.

"Overall, transport times are running 30 to 50 percent higher, so what should take 10 days is actually taking 13 to 15 days," Harpole said.

His company is not the only one hurting.

Union Pacific itself is being harmed by the congestion, according to its earnings report Thursday, which showed a 36 percent profit decline at the nation's largest railroad.

"Unprecedented fuel prices and high operating costs resulting from our service inefficiencies outweighed the revenue growth," Chief Executive Dick Davidson said in a prepared statement.

Attempts to reach a company spokesman Thursday were not successful.

Shipments rose less than 2 percent at Union Pacific, according to the Association of American Railroads, which tracks the movements. At competitor Burlington Northern Santa Fe Corp., shipments increased 11 percent.

Harris County County Judge Robert Eckels on Thursday called Union Pacific's congestion "a huge issue" for Houston.

"The economy of this region is dependent upon an effective rail operation," Eckels said.

The county judge said he has fielded concerns from businesses and business groups regarding Union Pacific's operations.

Among the others involved with the rail line that have expressed serious concerns are two other big chemical makers, Basell USA and Equistar.

Union Pacific officials say they are trying to catch up with facing unprecedented demand for rail transportation throughout the country and have hired 2,600 new workers, up 6.5 percent, to try to help deal with the stepped-up demand. But Lyondell reported having problems both with the service — particularly missing deliveries of empty cars — and with communication when there's a problem. Harpole said the service problems have cost the company millions of dollars.

Lyondell had to shut down production at its Chocolate Bayou plant several weeks ago when a train did not arrive on time, he noted. There also have been several near misses, according to the company.

Union Pacific owns most of the rail lines through Houston, having taken over Southern Pacific Railroad in 1997. That takeover almost immediately resulted in near-gridlock, with Houston at the center, as lines throughout the railroad's system became severely congested.

Lyondell was among a handful of companies that joined with Burlington Northern to propose construction of an $85 million, 12.9-mile rail line through the Clear Lake area. Union Pacific is the only line serving the Bayport Industrial District in Pasadena.

A court ruling last October blocked that proposal, but the decision has been appealed.

Eckels said not only is Houston affected by Union Pacific's situation, but he rest of the country as well because so many goods move through the Port of Houston.

(This item appeared in the Houston Chronicle Oct. 22, 2004)

October 22, 2004
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