Tuesday, November 19, 2013

UP to grain customers: We can handle it

Written by  William C. Vantuono, Editor-in-Chief
Union Pacific shipped an all-time-high number of grain trains to the Pacific Northwest in October 2013, and says it is poised to help its customers take advantage of a record grain harvest.

Following the 2012 drought, which significantly reduced crop production during 2012-2013, this year’s corn crop has set a new national record. In the most recent crop supply and demand report, the U.S. Department of Agriculture said it expects production of 13.99 billion bushels of corn, up from its September forecast of 13.8 billion bushels. The previous record was 13.1 billion in 2009. This larger production, combined with robust grain export markets, “will create much stronger demand for transportation during the 2013-2014 crop year, compared to the previous crop year,” UP said. “Customer commitments for our trains have increased accordingly.”

UP credits its ability to move all this grain to “superior network performance supported by the best average train speed among the four largest U.S. railroads,” according to data compiled by the Association of American Railroads. Average train speed is based upon measurements of cargo movement between rail terminals.

“Excellent service is always important to customers, and we are committed to maintaining it even as we accommodate the need for transportation of additional grain,” said UP Vice President and General Manager Agricultural Products Paul Hammes. “The combination of our train speed performance and available grain car fleet translates into increased freight capacity for our railroad’s agricultural customers.”

UP also is offering a six-month shuttle commitment program. Such programs allow qualifying customers to exclusively use railcars for a pre-determined amount of time, providing them with guaranteed capacity. “Traditionally, shuttle commitment programs have required customers to commit annually,” said Hammes. “The six-month option offers customers the opportunity to use the cars for a shorter time, allowing for greater flexibility during peak periods. Union Pacific prides itself on giving customers the assurance of capacity when they need it most. Our investments in service and equipment allow us to grow along with our customers.”