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Shippers gripe to Union Pacific executives

August 29, 1997

HOUSTON (AP) _ About 280 shippers complained to Union Pacific Railroad officials Friday about slowdowns that forced plant closings and led some to switch to trucks.

They sought answers on how long it will take the nation’s largest railroad to end the congestion on its freight lines and received promises that the railroad will add equipment and employees to better serve some of its biggest customers.

The closed-door, three-hour meeting at a Houston hotel was organized by the National Industrial Transportation League, which represents about 1,200 companies.

``The shippers were very upset,″ said Ed Rastatter, league’s director of policy. ``They’re losing money. They’re having to shut down plants.″

Shippers blamed the slowdowns on a lack of work crews, equipment troubles, problems with labor agreements resulting from last year’s merger of Union Pacific and Southern Pacific and recent derailments. They say problems have been particularly bad in the Houston area.

Terry Nickens, distribution manager for Riviana Foods Inc., said his company’s cost of shipping west of the Mississippi River is up as much as 20 percent.

Riviana, a major rice processor, normally uses rail for almost all of its shipments from Arkansas and Louisiana to Texas, but now is moving nearly everything on those routes by truck, he said.

``We’re all in this same hot water together now. The sooner we get out of it the better,″ Nickens said. ``It’s costing them as much money as it’s costing us.″

Carl Axelson, vice president of logistics for Occidental Chemical Corp., said his company’s main concern is how long it will take for Union Pacific to straighten out its problems.

``We’ve had disruptions, empty cars coming into plants,″ Axelson said. ``We’ve had plant shutdowns on both sides.″

Dick Davidson, Union Pacific chairman and chief executive officer, called the meeting constructive. He said the railroad is addressing safety concerns and adding engineers, switchmen and managers.

``We’re hiring hundreds of people down here to beef up our manpower,″ Davidson said, adding that the company is accelerating labor agreements and working on combining the computer systems of Union Pacific and Southern Pacific.

R.B. ``Brad″ King, a Union Pacific vice president, said the railroad is hiring 300 new employees in Houston and another 100 throughout the state. He said the company will bring in 327 new locomotives before January.

He said the labor agreement for the Houston area has been ratified by the unions and will go into effect Sept. 16. The railroad still is negotiating in East Texas and in Arkansas, he said.

``We hope to see those come to implementation in the fourth quarter,″ he said.

Union Pacific has been under review by the Federal Rail Administration this week after a recent series of train wrecks. The agency’s chief, Jolene M. Molitoris, said many Union Pacific employees are exhausted.

Still, Davidson said derailments have gone down every year since 1987 and injuries are down by about two-thirds.

Davidson said despite the problems, Union Pacific revenues in the third quarter will be a little stronger than they were a year ago. He said the railroad’s chemical business is still very solid.

``If we hadn’t been congested here, I think our business would have been up far more than it is,″ he said. ``Clearly it is having some impact on our business.″

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