UP Embargo on SPRB Joint Line: Accepting Coal for Existing Customers Under Currently Active Contracts and Common Carrier Rate Items Only
Effective July 18, 2005, Union Pacific is declaring an embargo on all stations on the Joint Line serving the Southern Powder River Basin ("SPRB") until further notice. This is to prevent our constrained transportation capacity from being overwhelmed by demands for additional service. The embargo does not reflect any change in Union Pacific's assessment of the conditions of the Joint Line or our ability to transport coal to our customers.
Track conditions and associated track restoration efforts have prevented UP from providing transportation for all SPRB coal that our customers and potential new customers want to receive. This embargo protects our ability to move as much coal as we can for existing contract and common carrier customers.
Under the embargo, Union Pacific will accept only traffic moving under currently active contracts or common carrier rate items. Current SPRB customers do not have to do anything or change their processes for tendering coal for shipment. No permits will be necessary. We anticipate that this embargo will continue until November, when weather is likely to force a suspension of track work.
We are taking this step because we have received a number of requests from customers for new service or service under different price documents. In addition, some customers have attempted to compel Union Pacific to carry larger shares of coal for them by asking for new rates. To protect our current SPRB customers, we are not soliciting or accepting new business to be carried on the Joint Line during the embargo. This will assure our customers that we will not reduce their respective shares of the available loads by diverting coal to those who request new rates or service for SPRB coal while the embargo is in force.
Union Pacific is committed to use its best efforts, given the disrupted operations of the SPRB coal network, to move as much coal as conditions permit to those customers with a contract in force or an active common carrier rate item as of July 18.
Your Union Pacific account representative can assist with any questions you may have.
Sincerely,
Doug Glass