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Union Pacific customers blast STB decision

NEW YORK – Many Union Pacific Corp. customers reacted negatively to the Surface Transportation Board’s (STB) decision Friday to lift emergency measures to improve rail service in the Houston area.

The STB cited "significant improvement" of Union Pacific service in Houston and said it would remove its nine-month emergency order that allowed rail customers to switch freight to other railroads to bypass UP’s massive congestion.

The board’s move went against recent recommendations by U.S. Transportation Secretary Rodney Slater, as well as groups representing more than 2,000 rail customers, to extend the measures.

"This is a horrible decision," Mike Spahis, manager of logistics and distribution at Fina Oil & Chemical Co., a subsidiary of Petrofina SA of Brussels, told the Wall Street Journal. He added that rail shipments through the Gulf Coast area are still taking 50% longer than two years ago.

The Chemical Manufacturers Association, the Society of the Plastics Industry and the National Industrial Transportation League had sought to have the order extended while the agency decides whether to make permanent changes to the rights granted to UP when the agency approved its acquisition of Southern Pacific Rail Corp. in 1996.

But UP said that the board's decision simply recognizes that the railroad has cleared up the worst of its congestion and continues to make improvements.

For more than a year, Union Pacific has struggled with massive service snarls in the Gulf Coast and other parts of its system. Hundreds of customers have had lengthy shipping delays, production curtailments and higher transportation costs. The service failures started when Union Pacific tried to digest Southern Pacific Rail Corp., and some of the problems have since spread to other railroads, including Norfolk Southern Corp.

In announcing its decision Friday, the Surface Transportation Board acknowledged that Union Pacific is "still not at uniformly improved levels" but that service in Houston has improved to the point there is "no legal basis" for issuing a further emergency order. The board said it was worried that continued diversion of freight to other railroads would weaken Union Pacific.

Ending the order means UP will regain exclusive service to some customers that had been served by Burlington Northern and Santa Fe Railway and Texas Mexican Railway while the decision was in effect.

The STB mandated a 45-day "wind-down" period that will extend until Sept. 17 for the shippers served by BNSF and Tex-Mex. The board said its intent was to "minimize disruption and re-establish service expectations."

Union Pacific still faces problems. It is in the midst of a STB proceeding to re-examine parts of the Union Pacific-Southern Pacific merger and determine whether to make Union Pacific permanently shed routes and facilities in the Houston area to competitors.

In recent weeks, UP waged a high-profile campaign to convince federal legislators and regulators that service levels were virtually normal in Houston. The agency rejected the argument that the order should be extended while permanent changes were weighed, saying that prolonging the emergency ruling would appear to prejudge the case it is considering.

The board Friday also moved to reject bids for more rail carrier competition from Cemex, a cement and aggregates manufacturer located near San Antonio, and Entergy, a utility that wanted BNSF service at one of its power plants in Arkansas.

The STB modified service reporting requirements that had been imposed on UP. The carrier had pressed to keep some information, such as train delays and freight car switching efficiency, confidential because UP claimed the data were being used against it by competitors. That type of data will continue to be disclosed publicly. However, the board told UP to report information bi-weekly in the future, instead of weekly.

Texas heat buckles railroad tracks

FORT WORTH -- A brutal heat wave sizzled on with temperatures well over 100 degrees warped railroad tracks so badly that two freight trains derailed.

Sunday's temperature in Dallas hit 107, making it the 28th consecutive triple-digit day, second in the record books to the 1980 streak of 42 days. Dallas' overnight low of 77, however, was the first time the city has cooled below 80 since July 19. Ninety-nine deaths statewide have been blamed on heat-related causes, pushing the nationwide total to 155, including 29 in Louisiana and 19 in Oklahoma.

Heat-warped railroad tracks derailed 13 cars of a 112-car freight train about 8 miles north of Fort Worth on Saturday, Union Pacific spokesman Mark Davis said. Davis blamed it on a "sun kink,'' when a sudden change in temperature or extreme heat expands the rail and moves it out of alignment.

Hill County sheriff's Deputy Joe Milligan said the same could be said for another Union Pacific accident Saturday, a Houston-bound 126-car train carrying coal from Wyoming. It ran off the tracks near Hillsboro, about 60 miles south of Dallas. Twelve cars derailed.

"The tracks are expanding all over the state,'' Milligan said. "Once they expand, they shift a little bit and come out of their beds under these heavy coal trains.'' Davis said Union Pacific has been monitoring its tracks daily because of the summer heat, and has reduced track speed limits by 10 mph.

Wisconsin Central reports record income

ROSEMONT, Ill.-- Wisconsin Central Transportation Corporation today reported net income for the second quarter of 1998 of $19.0 million, a decrease of $1.7 million, or 8.0 percent, from the second quarter of 1997. The second quarter of 1998 included record North American net income, offset by reductions in the company's equity in net income of affiliates. Diluted earnings per common share for the second quarter of 1998 were 37 cents, versus 40 cents for the year-ago quarter.

The company's second quarter 1998 operating income generated from North American operations reached a record $23.9 million, an increase of 13.2 percent from the year-ago quarter. The company's North American operating ratio for the second quarter of 1998 was 71.8 percent compared to 75.1 percent for the year-ago quarter.

Edward A. Burkhardt, WCTC chairman and chief executive officer, said, "We have made significant investments in our track, rolling stock and safety programs and I am very pleased with the continued improvements being realized in our North American operations."

The company's North American operating revenues for the second quarter of 1998 were $85.0 million, the same as the year-ago quarter. Volume decreased compared with the second quarter of 1997 by approximately 7,400 carloads, or 5.0 percent, to approximately 138,400 carloads. This decrease in volume is primarily attributable to the conversion of 6,200 intermodal units to a haulage arrangement (haulage traffic is not included in the company's carload volume) and to the termination of a metallic ore transportation agreement which contributed approximately 8,900 carloads to the second quarter of 1997. No carloads of metallic ore were handled under this agreement in the second quarter of 1998. Partially offsetting these volume decreases were increases in woodpulp, lumber, chemicals and petroleum products, sand, stone and minerals, food and grain, coal and steel.

For the six month period ended June 30, 1998, WCTC reported record net income of $39.5 million, or 77 cents per diluted common share, compared with $38.3 million, or 75 cents per diluted common share for the year ago period.

Florida "Fun Train" hits truck, kills driver

LAKE ALFRED, Fla.-- A driver was killed Saturday when the Florida Fun-Train, a family attraction on rails, ran into his tow truck during the train's first full trial run between Orlando and Tampa.

The train struck the truck at a central Florida grade crossing about an hour after it left Tampa. None of the 50 passengers and crew was reported injured.

Scott W. Jackson, 26, of Davenport, had a car on his flatbed wrecker when the train hit, ejecting him from the cab, troopers said. It wasn't known what the truck was doing on the tracks, said Ron Hartman, chief operating officer of First American Railways, which owns the Fun-Train.

The train can travel at speeds up to 79 mph and was operated by an Amtrak engineer and conductor, Hartman said.

The Fun-Train is equipped with high-tech games and virtual reality adventures for kids. There also is a space shuttle play area, a movie car, and a bar with palm trees and a thatched hut where passengers can drink cocktails and dance. The train, with four guest cars and four entertainment cars, also has a baggage car and two locomotives.

BNSF train kills four in Missouri

SPRINGFIELD, Mo. – A Burlington Northern Santa Fe train struck and killed three women and a man who stopped to take pictures from a railroad bridge near here on Friday, officials said.

The victims, who have not been identified, died instantly after the BNSF train hit them on a trestle. One person survived by jumping off the bridge. The survivor said the group had been unaware of the approaching train.

Russian miners blockade in east cuts power

MOSCOW --With an electricity blackout looming, striking coal miners maintained a railroad blockade for a 10th day Monday outside the main power station on the eastern Russian island of Sakhalin.

The protesters have prevented coal from reaching the power plant, and officials have begun to ration electricity on the island, the ITAR-Tass news agency reported. One of the plant's electricity generating units already has been shut down, and the second only has enough coal for a few more days.

Ivan Malakhov, the first deputy governor of Sakhalin, said the blockade was illegal and hinted that authorities could use force to remove the miners from the railroad line. The miners have vowed not to lift the blockade until they are paid eight months of overdue wages.