Content area
Full Text
How Union Pacific stumbled, again, is an interesting story. How it is coming back is a better one.
In August 2003, Union Pacific's executive vice president of operations, Dennis Duffy, made a trip to the central California terminal at Roseville to see United Transportation Union officers. For months, UTU had complained that the crew base was eroding. Men were being worked to the bone and no new hires showed up. Duffy acknowledged that a manpower shortage existed. In fact, the purpose of his visit was to get the union to help the railroad over its difficulties. He said the railroad would begin hiring conductors again in September, and was true to his word, says UTU local chairman Bill Schultz. New hires soon began dribbling into the Roseville hub. By then, however, it was too late.
Months of deteriorating service quality throughout the railroad's Western Region had already begun to snowball into a mess, centered on the Sunset Route between El Paso and Los Angeles, and the big L.A. Basin classification yard at West Colton. Union Pacific was facing its third crisis in less than a decade.
You won't hear Dick Davidson tell it, but this blow to its solar plexus may have been just what the proud but stubborn company needed to force a longoverdue look at how it manages its business. Transportation realities changed a couple of years ago, giving railroads market power such as they hadn't seen in a century. But Union Pacific didn't change. Managing its trains with too much attention to budgeted costs and too little to high service levels, it was taken by surprise by the swell of new business and paid a terrible price. Its reputation suffers, as does the bottom line. Adding insult, after 18 months of struggle, UP still cannot get its trains running per plan. Normalcy is always a month from now.
For instance, this autumn, key intermodal shipper Pacer Stacktrain reported its containers were consistently running one to three days late between Chicago and the West Coast, just as they had been for more than a year. During October, trains were held in terminals an average of 1,246 hours per day awaiting locomotives - that's the same as 52 trains halted a full 24...