Assembly Panel Interrupts Recess to Examine Rail Delays

Even though the beleaguered Union Pacific railroad is working overtime to get its operations back on track, the ongoing systemwide delivery logjams have left mountains of California-bound grain rotting in the Midwest and have delayed needed shipments of fertilizers the state’s farmers rely upon for their plantings of winter crops.

Members of the Assembly’s Agriculture Committee interrupted their recess recently to summon representatives of the nation’s largest railroad to the state Capitol and inform them that their massive breakdown in service was threatening California’s $24-billion agricultural industry.

“The inability of the railroad to maintain continuity of supply and materials has caused many who must plant winter wheat, alfalfa and the new tomato crop to lose a crucial window of opportunity that they can’t get back after the rain,” said Assemblyman Michael Machado (D-Linden), himself a San Joaquin Valley farmer.

Union Pacific won approval for its $3.9-billion merger with the ailing Southern Pacific little more than a year ago by promising “dramatically improved service,” but a glut of rail cars and labor problems led to unprecedented rail gridlock across much of the nation.

That has meant long delays in the arrival of fertilizer and feed grain into California, which depends almost entirely on rail shipments to supply agricultural customers. Shipments that once took 10 to 14 days have been taking 25 to 45 days or longer.

The state’s $3.5-billion dairy industry, as well as its poultry, egg and livestock production, depend on massive imports of grain--up to 180,000 rail cars worth annually.

Unless Union Pacific can end the delays by the beginning of the year, fertilizer manufacturers forecast massive losses not only to their sector but to crops relying on fertilizer for normal yields. The problem, according to representatives from the California Fertilizer Assn., stems from the state’s nearly 100% reliance on imported potash, phosphates and nitrogen.

For fall fertilizer needs, the industry turned to trucking firms at a 20% cost increase to meet demand. But consumers, they say, could see higher produce prices as a result.

Union Pacific officials have pledged a return to normal delivery schedules by the end of the year--and there is some evidence that the deadline may be realized. Under the stress of tracking the nearly 360,000 rail cars accumulated through its merger, the Dallas-based railroad has become overwhelmed and lost track of millions of dollars of shipments.

To increase “fluidity,” Union Pacific shut down its major Southland terminus at Colton on Thanksgiving Day, held trains from the Southwest and spent 24 hours clearing stranded cars.

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Federal regulators decided late Thursday to extend for three months an emergency order requiring Union Pacific to cooperate with competitors to clear train congestion that has bottle-necked the Western United States.

The government’s Surface Transportation Board extended its emergency order until March 15.

The nation’s largest railroad had argued against extending the order, which was to have expired at midnight Thursday, claiming a backlog could be eliminated and rail traffic returned to normal by Jan. 1.

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