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Saturday, August 30, 1997

Shippers meet with Union Pacific executives to air grievances

By MICHELLE KOIDIN / Associated Press Writer

HOUSTON (AP) -- About 280 shippers met with top Union Pacific Railroad officials Friday to complain about congestion that has caused extensive delays and forced them to shut down plants and in some cases switch to trucks.

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

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.

"The shippers were very upset," said Ed Rastatter, NITL's director of policy. "They're losing money. They're having to shut down plants."

Terry Nickens, distribution manager for Riviana Foods Inc., said his company's cost of shipping west of the Mississippi River are 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, said the meeting was 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, the nation's largest railroad, 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.

"We've made continuous improvements in safety year after year after year," he said. "In this compressed window of the last few months, we've had some terrible accidents where five of our employees have lost their lives, so that indicates that things are out of control a little bit right now, that something is interfering with our normal safe operations."

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."