Letter From Jack Koraleski

April 22, 2004

To Our Customers:

This is an update on the material we provided on April 15 regarding service at Union Pacific. Many customers told us that this material was useful, and we plan to continue to provide regular communications on this subject.

A week of improving weather and no significant service interruptions is helping our recovery, and we are pleased to see that our increased hiring and training are starting to produce large numbers of additional crews. Our average train speed, as reported to the Association of American Railroads, was up .9 mph to 21.6 mph and our terminal dwell continued a positive downward movement to an average of 36.6 hours…not where they need to be, but moving in the right direction.

We are continuing to add qualified employees:

  • During the past week, 67 additional train service employees have completed training and are now working. Our hiring and training program is targeted toward the areas of greatest need, so about one-half of these people – 34 – are working in the Western Region, with the balance assigned throughout the rest of the company. Currently, there are 1,712 people in the training pipeline. Seventy-six trainmen began engineer training earlier this month.

Additional locomotives are arriving daily:

  • Of the 112 locomotives targeted for delivery in the month of April, 84 units have entered service already, and the delivery schedule remains firm.

We’ve made some progress in critical areas:

  • The major bridge in Mexico south of Eagle Pass, Texas, that washed out several weeks ago, has been replaced and is back in service. The bridge on our busy line north of Kansas City that was destroyed on March 28 is being rebuilt and will return to service on April 25. The temporary bridge will remain in use until then.
  • Operations around Phoenix and Tucson have improved. An alternative unloading facility in Tucson is open and handling about 20 cars per day. Also, a similar facility is now in operation in Montclair, California. However, crew shortages continue to delay train operations and local switching service in Southern California, especially on weekends.
  • Union leadership continues to work with the railroad to reduce the effects of these shortages, and over the last weekend, was instrumental in helping us move additional trains in Southern California. Congestion at the West Colton Yard has improved somewhat as well.

Current problem areas:

  • We remain short of crews in the Hinkle/LaGrande, Oregon area and on the route between Southern California and Las Vegas. Spot shortages remain in the Los Angeles basin, including the Intermodal Container Transfer Facility, particularly on weekends. Some congestion remains in the Houston area and is being addressed by directing additional locomotives to that area.

In conclusion, demand remains very strong and we continue to develop alternatives and processes to continue our recovery.


 


Executive Vice President-Marketing and Sales