Rail Delay May Affect Consumers

Consumers will be hit with higher prices for a wide range of merchandise because of the massive delays in Union Pacific railroad shipments at the ports of Los Angeles and Long Beach, a federal official warned Wednesday.

Containers of cargo that usually would be unloaded once and then moved out by railroad now are being shifted from five to seven times within the region because of the backlogs, said Gus A. Owen, vice chairman of the federal Surface Transportation Board, which has declared a transportation emergency in the West and held hearings on the problem Wednesday.

The cost of the additional handling, $75 for each additional move, “will be passed to consumers,” Owen said.

With trains delayed from the Pacific Northwest, some operators of Christmas tree lots in the Los Angeles area have complained that they have not gotten their deliveries, Owen said at a board hearing called to assess the congestion problem.

The board is to decide today whether to extend its 30-day emergency order allowing competitors of Union Pacific access to the giant rail system’s tracks in the Houston area, where the backlog of locomotives and freight is at its worst.

The delays throughout the Union Pacific system originated at the Houston rail yard and have rippled across the railroad’s entire network, from the West Coast ports to the coal regions of the Rocky Mountains and the Midwestern grain belt.

Delivery times have doubled for goods moving in and out of the ports of Los Angeles and Long Beach, leading to the worst rail traffic jams and delays in 35 years, Kenneth Koss, director of the rail safety and carriers division of the California Public Utilities Commission, told the hearing in Washington.

Both Owen and board chairwoman Linda Morgan seemed deeply skeptical of claims by Union Pacific executives that the rail traffic crisis is easing.

“We are hearing from users of the system that the situation is not resolved,” Morgan said. “Are they all wrong?”

But a combative Dick Davidson, chairman and chief executive officer of the Union Pacific Corp., told the board, “We have cleared the decks of the backlog and congestion.”

Officials at the Douglas Fir Christmas Tree Co. in Shelton, Wash., which supplies about 700,000 Christmas tress annually, said Wednesday that the rail merger and subsequent delays have kept a large volume of this season’s trees in trailers awaiting shipment.

“Things have gotten backed up,” said the company’s owner, Joy Stohr. “It is very frustrating when you need to get your product to market. Because of the merger of the railroads it has been very difficult on transportation and caused a lot of delays.”

The transportation board’s emergency order on Oct. 31 allowed other rail carriers to handle some Union Pacific traffic to relieve congestion in the Houston area. The other railroads are using Union Pacific tracks to move the merchandise.

“Lewis and Clark could not get through Houston in the past month,” said Larry Fields, head of the Texas Mexican Railway Co., which was given an expanded right to handle rail traffic in Houston.

Owen chastisted the railroads for blaming each other. “There’s so much business. . .but you fight each other on a continuing basis,” he said.