UNION PACIFIC has another fight on its hands. On July 8 a coalition of shippers, industries, railways and elected officials filed a request with the Surface Transportation Board that seeks to end UP’s near monopoly in the Houston region. The plan is one of several deposited with the STB aimed at ending the congestion which has plagued Texas since last summer.
The coalition is led by the Texas Railroad Commission, the Chemical Manufacturers Association, the Society of the Plastics Industry and the Texas Chemical Council. They were joined by the Texas Mexican Railway and Kansas City Southern, both of which have long complained that the UP-Southern Pacific merger was anti-competitive as UP now controls about 85% of rail assets in the Houston area.
BNSF chimed in with its own eight-point plan seeking changes to the conditions granted by the STB when it approved the merger. BNSF claimed that traffic was being unnecessarily routed via Houston and that it cannot compete effectively using its trackage rights in the Gulf Coast area because of ’unpredictable and unreliable service’ by UP.
BNSF also attacked the relationship between Tex-Mex, KCS and their Mexican concession as having affected its ability to compete with UP at the Laredo gateway. BNSF wants trackage rights to run through on several of UP’s Texas routes, mainly between San Antonio and Laredo. This would allow BNSF to bypass Houston with a more direct and less congested route for Mexico-bound traffic.
Shippers and Texas officials contend the merger was the root cause of UP’s unreliable service, which they estimate has cost the Gulf Coast economy over $1bn. UP claims the worst is over and it will be able to return to normal without radical STB action. It says terminals in Texas and Louisiana are operating smoothly and transit times between Houston and New Orleans have improved dramatically. Chairman & CEO Dick Davidson called the filings ’opportunistic grabs’ for key portions of his network and said UP would respond in detail by the STB’s September 18 deadline.
HUP is building 400m of new track between its Englewood and Settegast yards in Houston to allow wagons to transfer between them in minutes compared with a circuitous route that can take hours. The $4m link is to open later this month. o