OMAHA, Neb. — Union Pacific has paused its use of new embargoes to limit congestion.
The move, announced today (Friday, Dec. 16), comes after two days of Surface Transportation Board hearings where shippers, rail labor, and regulators were critical of the railroad’s increasing reliance on embargoes since 2018, the year it adopted a Precision Scheduled Railroading operating model.
“Thank you for the opportunity to appear at this week’s hearing regarding Union Pacific’s use of embargoes. I appreciate the feedback we received from our customers and the Board,” CEO Lance Fritz wrote to STB Chairman Martin J. Oberman. “I assure you, we are taking a hard look at our use of congestion-related embargoes. To facilitate that hard look, we are immediately pausing any additional embargoes under the pipeline inventory management program we began in November. The Board and our customers can expect to hear more from us on this subject in the coming days.”
Regulators last month ordered UP to explain why it has significantly increased its use of embargoes. With UP running short of train crews, the railroad has issued more than 1,000 embargoes so far this year in response to congestion, compared with just 27 in 2017. UP has issued the vast majority of Class I railroad congestion-related embargoes this year.
In April and November, with congestion rising in some of its local service yards, UP asked certain carload customers to reduce their inventory of private cars or face the prospect of an embargo that would limit the flow of inbound empties as well as loads.
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