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Cash Market Moves

By Mary Kennedy
DTN Cash Grains Analyst

Union Pacific (UP) has announced a new operating plan to implement Precision Scheduled Railroading principles. Soon after, the U.S. Surface Transportation Board wrote a letter to UP requesting weekly phone calls about the implementation of its operating changes and any impacts to its customers and others.

"Unified Plan 2020 will launch Oct. 1 and will be rolled out in phases across the entire Union Pacific (UP) rail network," UP said on its website Sept. 17. "Effective Oct. 1, 2018, this plan will combine Precision Scheduled Railroading principles with our UP Way best practices by involving our employees closest to the work, taking a thoughtful and deliberate approach to phasing in the roll out, and communicating thoroughly with you, our customers. By fundamentally shifting our focus from moving trains to moving cars, we will be better able to place an emphasis on reducing car dwell," said UP.

The company said under the new plan Union Pacific customers can expect to see:

-- More reliable and predictable service offerings

-- Improved availability of crews and locomotives

-- Potential for improved customer asset utilization

-- Direct communication in advance of changes.

UP said that this plan will first be implemented on its North/South corridor, creating more streamlined operations from Wisconsin to Texas. "Further roll out will occur in phases with initial implementation across the entire rail network expected by 2020. We will closely monitor the impact of these changes to align our strategy with our overall goals to improve network performance and provide the reliable service you have come to expect," added UP.

Three days later, on Sept. 20, the Surface Transportation Board (STB) sent a letter to UP, asking for weekly conference calls for briefings with UP senior management on the carrier's plan to implement its version of the precision scheduled railroading, an operating plan made popular by the late railroad CEO E. Hunter Harrison.

In the letter to UP, the STB said "We are well aware of UP's service challenges this year and believe that it is essential that all carriers strive to provide efficient and reliable service to their customers."

The STB reminded UP in the letter that the CSX Transportation, Inc. (CSX) last year experienced serious service disruptions for its customers, and for other railroads as well, when CSX implemented the same program. "In light of those events, we trust that the UP will work in a transparent manner to avoid similar disruptions in the nation's rail system," said the STB.

The STB asked UP to keep the Board fully informed about the implementation of its operating changes and any impacts to its customers and others and to begin holding weekly phone calls with the staff from the Board's Rail Customer and Public assistance office. The letter also noted that UP Executive Vice President Kenny Rocker will meet with Chairman Ann Begeman and Vice Chairman Deb Miller and agency staff in October to provide more detailed information on UP's planned operating changes.

In response to the STB letter, UP said that it is "happy to accommodate the request of weekly calls" and added the company has already started scheduling the calls.

The National Grain and Feed Association noted, in a Sept. 21 press release, that UP said its "version" of precision scheduled railroading (which Harrison implemented at the Illinois Central, Canadian National, Canadian Pacific and CSX during his respective tenures as their CEO) will consist of:

1) Shifting the focus of operations from moving trains to moving cars

2) Minimizing car dwell times, car classification events and locomotive power requirements

3) Utilizing general-purpose trains by "blending" existing train services

4) "Balancing" train movements to improve utilization of crews and rail assets.

NGFA President Randy Gordon commended the STB for its enhanced monitoring of UP and said NGFA will follow up with the agency on ways NGFA can continue to relay "ground-truth information" from its members on UP's service performance as it implements precision scheduled railroading.

(To read about the issues affecting the performance of the CSX after it implemented precision scheduled railroading, here is the link to the DTN blog on it from Aug. 28, 2017: https://www.dtnpf.com/…)

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow her on Twitter @MaryCKenn

(BAS/ES)