Letter From Jack Koraleski
May 17, 2004
To Our Customers:
Velocity and terminal dwell time data as reported by the Association of American Railroads continue to show that we are holding our own on these metrics across most of our system.
We are starting to see the benefit of our increased hiring and training:
For the past week, operations across the Sunset Route and in the Los Angeles basin have shown marked improvement with all of the yards in that critical hub now current with switching railcars. The alternative unloading facilities we are using in Tucson and Montclair, California continue to operate. Velocity is improving and the number of hours per day of trains being held for crews in these areas has improved significantly.
We are continuing to maintain our accelerated pace of hiring with 879 new train service employees joining the Company so far in the second quarter. Training for locomotive engineers, a critical component of our recovery effort, remains on plan with 139 conductors slated to begin training as engineers in May.
The unions representing our operating employees continue to work constructively with us to improve customer service.
The work stoppage by independent truckers in the West appears to be waning:
The work stoppage by independent truckers in the West that caused us to place an embargo on our facilities in Lathrop and Oakland has eased to the point that we have lifted the embargo at Lathrop. There appears to be progress in resolving this situation in Oakland as well and we anticipate ending that embargo shortly. Obviously, we will continue to monitor the situation and respond accordingly.
New freight cars are being added to the fleet:
Total freight car additions to the fleet including purchases, leases and other sources will total 6,250 this year. In addition, we are improving our car cleaning operations to expedite cars moving through this process.
Our current problem areas:
In the Pacific Northwest, our Portland service unit continues to struggle with yard congestion and velocity. We are in the process of moving employees from less-busy parts of the Railroad to Portland to add to our crew base there. We are also increasing the supply of locomotives in that area.
We continue to send an increased number of locomotives to Houston where we have been struggling with yard and main line congestion. The power shortage has led to some crew delays as well. Heavy rains at the end of last week slowed our recovery as flooding closed several lines in Texas. At one point on Thursday, eight crews were stranded in their locomotives as flooding washed out tracks around them.
Other developments:
We are continuing to work on ways to manage the flow of business across the most capacity constrained sections of our system, and we are working aggressively to reduce the number of foreign cars on our network.
Executive Vice President-Marketing and Sales