Capacity fears trigger allocation limits at UP

Capacity fears trigger allocation limits at UP    The Union Pacific Railroad Co. said it is creating an allocation system for certain shipments, to avoid overcapacity at some of its rail terminals.
   BNSF, the other large western railroad, has also recently announced a program of capacity allocation limits.
   In a letter to the U.S. Surface Transportation Board dated July 9 about the peak shipping season this fall, UP confirmed it is experiencing “current service difficulties and strong demand,” and said it has revised its forecasts.
   In the second quarter of this year, the railroad handled more carloads (2.37 million) than in any quarter in its history.
   “Looking ahead, we expect demand to continue to increase, with peak season expected to be at record levels as well,” UP told the Surface Transportation Board. “Because of this, Union Pacific must control the volume of business in several key corridors and terminals by limiting carloadings and train operations.”
   The additional measures that UP announced include:
   * Creating an allocation system for certain shipments to protect critical terminals from overload.
   * Temporarily limiting the number of rock and aggregate materials carloads handled in Texas.
   * Consolidating selected automobile and chemical trains.
   * Regulating the volume of selected agricultural commodities.
   * Capping the number of incremental train starts.
   UP acknowledged that, in some instances, “alternative methods of transportation will be a challenge, given the huge demand and strain on all forms of freight transportation today.”
   The railroad said it is closely monitoring traffic to and from Southern California, particularly the growing intermodal traffic through the Southern California ports.
   “UP’s Sunset Route between Los Angeles and El Paso has no excess capacity,” it said, adding it plans to add 53 miles of second main track to that line this year.
   UP said it is in regular contact with its largest customers and is contacting those customers who will be most affected by its plans.
   UP is planning to hire more train and engine employees, and said it has moved large numbers of conductors into engineer training. But due to strong demand, UP said it will probably not have enough engineers this fall in the Northwest part of its rail network.
   “As previously reported, Union Pacific has scoured the marketplace for both new and operable leased locomotives,” it added.