UP CEO Lance Fritz: Railroad still doesn't need Brazos Yard switching capacity

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LanceFritz
UP CEO Lance Fritz
Union Pacific
NEW YORK CITY — Industrial products traffic has been a lone bright spot for Union Pacific this year as plastics, petrochemical, and construction-related carload volume has continued to grow on the U.S. Gulf Coast.

But UP has reduced car handlings enough through Precision Scheduled Railroading that it still does not need the additional switching capacity Brazos Yard would bring to Texas, CEO Lance Fritz told Trains last week.

UP in the spring stopped work on the new classification yard being built near Hearne, Texas, at the strategic junction of seven main lines. It diverted Brazos Yard funding to building and extending passing sidings, as well as a block-swapping yard in Santa Teresa, N.M., so it could run longer trains across the Sunset Route in California, Arizona, and New Mexico.

UP began building the $550 million Brazos Yard in early 2018 and expected it to open by early 2020 to handle growing volumes on the U.S. Gulf Coast, as well as cross-border traffic headed to and from Mexico.

Instead, UP hit the pause button because Unified Plan 2020, the railroad’s version of Precision Scheduled Railroading, aims to reduce the number of times cars are switched en route.

The reduction in car handling has siphoned enough switching volume out of the network that UP has been able to idle the humps at Hinkle, Ore., Pine Bluff, Ark., Proviso Yard in Chicago, and Neff Yard in Kansas City, Mo. UP also has consolidated yards across its system, including in Salt Lake City, Denver, Louisiana, and Missouri.

Fritz says keeping Brazos Yard construction on hold is a prudent capital allocation decision in light of the railroad’s continued gains in operational efficiency.

The railroad had touted Brazos as the single largest capital project in its history, and officials had said the yard would boast the lowest operating costs of any switching facility on its system.

UP Chief Operating Officer Jim Vena has said there’s nothing wrong with hump yards. They’re the most efficient way to classify traffic, he says, as long as the yard is in the right place and has sufficient daily volume.

NEWSWIRETrains News Wire

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