Union Pacific CEO explains why hump yards are still important

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NEW YORK — Union Pacific, which is bucking the Precision Scheduled Railroading trend of idling the humps at classification yards, still needs the new hump yard it’s building in Hearne, Texas, CEO Lance Fritz says.

The late CEO E. Hunter Harrison converted several hump yards to flat-switching facilities at Canadian National, Canadian Pacific, and CSX Transportation after implementing his operating model.

UP has so far defied expectations that it would do the same as it introduces an operating plan based on the principles of Precision Scheduled Railroading.

And the railroad will continue building the $550 million Brazos Yard, which is scheduled to open in 2020 at the junction of seven UP main lines in Texas.

“If you look at our utilization of hump yards, it’s pretty is high,” Fritz told the RailTrends 2018 conference last week. UP doesn’t have a hump yard operating below 80 percent of fluid capacity.

If transportation plan changes did drop a hump yard below the 80-percent figure, Fritz says then the yard will wind up in the terminal review process alongside UP’s current review of local and regional yards.

“The reason why we’re building Brazos is that all of our network yards in the south — from North Little Rock to Pine Bluff to Fort Worth to Livonia to Englewood and Settegast — are all at or near fluid capacity,” Fritz says. “Some of them are above it.”

In light of the reduced car-handlings under its new operating plan, UP reviewed Brazos to determine whether construction work should be halted.

“The answer is, ‘no,’ because of the growth we see coming on,” Fritz says. “We still think we need that yard.”

UP’s merchandise traffic has been running at near-record levels on its Southern Region. Gulf Coast energy-related traffic is on an upswing, as is plastics production at new and expanded plants in Texas and Louisiana.

“The thing about Precision Scheduled Railroading isn’t get rid of hump yards, right? It’s don’t touch the car if you don’t have to,” Fritz says.

In many cases, other Class I railroads idled or closed hump yards because they were switching cars that didn’t need to be switched at that particular terminal, Fritz says. That hasn’t been the case so far as UP has made operational changes on its Mid-America Corridor linking the Midwest and Gulf Coast.

But Fritz says that if a hump does become underutilized, it will be closed.

The RailTrends 2018 conference is sponsored by independent analyst Anthony B. Hatch of ABH Consulting and industry trade publication Progressive Railroading.
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