UP Story in 22 July WSJ Edition

[PNWRMNM]

The story was accurate and moderate in tone considering what a mess the UP has made of themselves. The UP has lost the ability to execute anything.

The whole industry has reduced capacity to a level that is at or below demand, so incremental business comes at high marginal cost, not the low marginal cost the economics texts talk about. The excess capacity is gone and adding capacity is very expensive. UP admits to being short of crews and power. Crews and power are relatively cheap and easy to add. Track and signal capacity is more expensive and takes longer. The world has changed. UP did the worst job of predicting it, and that is why their name is now mud. The good news is that they should be able to spend their way out of the short tem problem.

Would remind all that if UP was a trucking company they would not have the trucks and barge lines would raise rates to ballance supply and demand. In either case would be no public stink. Frankly I am surprised UP has not raised rates. Maybe they have and we just don't know it. I suspect they have not or shippers would be wailing about that too.

An occassional car misroute is almost as old as the industry is however.

Mac

[cstaats]

I read the article today. It speaks about the bottlenecks the U.P. is having and the retirements of crews, bottlenecks and lack of capacity as reasons fort he service disruptions. However this seems to me a more systemic problem and these are excuses than facts. Think there are going to be any mergers think again would you want a transcontinental screwing up. Sending my freight to Portland, Maine instead of Portland, Oregon. Can any one say scheduled Railroad. It does have merits. What does the board think?

[Anonymous]

Well, they have already advised many of their major customers including UPS to "truck it" so, I think they have the idea...

LC

[Randy Stahl]

Maybe UP should "walk away' from all that troublesome buisness like the CN does.
Randy

[Anonymous]

UP takes another well deserved pummeling due to poor service...

LC

[Anonymous]

I posted the following on the Model Railroader forum--perhaps someone who participates in this forum can comment on it:

I know I probably should post this on a Trains forum rather than an MR forum, but there has been a confluence of events that I have found interesting that may open up some possibilities for UP modellers. I work in downtown LA and when I drive home in the evening, I take a shortcut by Dodger Stadium that overlooks the UP (former SP) Taylor Yard. Over the past couple of weeks, I noticed that some old SP locomotives were brought in for refurbishing. They appear to be some fairly old GE units, but I have to keep my eyes on the road, so I only get a momentary glance. The units have been refurbished and appear to have a gray primer coat of paint with a red stripe at the bottom. Looks like they will be repainted in UP colors. Yesterday's Wall Street Journal had an article on page 1 discussing the locomotive shortage that UP is currently experiencing and the drag that is placing on the national economy because goods shipped through the UP system are not getting to market.

My questions are--does anyone know what type of GE units are being refurbished? They appear to be of the U Boat vintage (perhaps U-30's), but I am not sure. Does it make sense the UP would be refurbishing units that are that old? If so, it really opens up some interesting modelling possibilities for those who model the current era.

[jeaton]

Mistakes can be made. Even though the "paper work" is highly automated, an error in a car number or a destination code might get a car off on the wrong track. Garbage in, garbage out.

There is also the possibility of an error on the ground. Ed Blysard could probably tell how it takes some experience on the job before a switchman developes a knack for keeping track of what car goes on what track and how to get it there - which sequence of switches to throw. And, at the same time, making sure to stay safe.

Once a car gets in the middle of the wrong block or cut of cars, it might take many minutes of engine time to dig it out of the block when the mistake is discovered. Crew shortages, inexperience, and a surge of traffic can greatly increase the possibility of errors, and make it that much tougher to do the work to fix the problem.

Jay

[ericsp]

I have seen cars that were supposed to go to the Bay Area come south through here only to go back north in a day or two. And that was a couple of years ago.

[eastside]

I forgot to include the part saying that the hapless lumberyard owner is in Tempe, AZ. Being a non-railroad person, I wondered how on earth the lumber from Oregon could have been routed through Pennsylvania! It seems to me it should have stayed on UP's rails all the way. Am I right?

[Anonymous]

The Question is, when are their problems going to get back to normal?

[eastside]

The Wall Street Journal has a first page story on UP's troubles. An excerpt:
"Glenn Miller thought he could rely on Union Pacific Corp. That was before the U.S.'s largest railroad started falling behind on deliveries to his wholesale lumberyard, which is connected to Union Pacific by its own rail spur.

"A series of orders took about a month each to arrive at Miller Wholesale Lumber Co. when they should have taken about 10 days. In the spring, one lumber shipment from Oregon spent three months riding the rails, including an unscheduled detour into Pennsylvania on another railroad. Union Pacific tried using a trucking company, but multiple loads of wood were warped by the desert sun and one went to a competitor by mistake. The snafus cost more than $200,000, Mr. Miller estimates, because he had to buy lumber on the spot market to meet his obligations. "It's a nightmare for guys like me," he says."

If you don't get the hardcopy, the story is at
http://online.wsj.com/article/0,,SB109045934334670574,00.html?mod=home%5Fpage%5Fone%5Fus
Access is restricted to subscription.

Another excerpt:
UP estimates that completing the double tracking of the Sunset route would cost $1.5 billion.