Railroad Must Open Track to Ease Crisis

Federal regulators Friday issued an emergency order requiring troubled Union Pacific Railroad to open a section of track to a Texas competitor in a bid to ease the gridlock that has harmed shippers across the Western United States.

The Surface Transportation Board, which just days ago held a marathon hearing on the problems at the nation’s largest railroad, said Friday that there is a “transportation emergency in the West.”

In a bid to ease the congestion that began months ago in Houston and then rippled throughout the railroad’s 36,000-mile network, the board ordered Union Pacific to grant some trackage rights to the Texas Mexican Railway.

Tex-Mex also will be allowed to accept traffic from certain Houston shippers that are under contract with Union Pacific.

The board also ordered Union Pacific to facilitate the operations of Tex-Mex and Burlington Northern Santa Fe in the Houston area. And the panel set a Dec. 3 hearing for Union Pacific to demonstrate progress in solving its service problems.

Union Pacific executives had argued against federal intervention, saying the recovery plan they put in place Oct. 1 will restore normal service by the end of the year.

Union Pacific Corp. Chairman Dick Davidson said the railroad will not challenge the 30-day emergency order, which takes effect Wednesday.

The railroad has been hampered by rail congestion, lack of equipment and crews, and multiple wrecks, including two in the last week.

The rail headaches have clogged California ports with ships waiting days for rail cars to take their cargo, stranded bumper grain crops in the Midwest and closed some Gulf Coast petrochemical plants that are unable to get needed materials.

The Texas Railroad Commission estimates the rail disruptions have cost shippers nationwide at least $1 billion since July in extra freight charges, lost production and lost sales.