Letter From Jack Koraleski
November 17, 2004
To Our Customers:
Through mid-November, we have not seen the normal seasonal decline of business, as peak season continues to produce record volumes moving across our network. It looks like this record-setting pace will continue as we move toward the holidays. Our average train speed during the past month was 21.3 miles per hour. Our key terminal dwell was 35.0 hours for the month. In October we hired another 307 train service employees and graduated 469. Well-trained new employees will continue to join train service during the remainder of the year.
Our increased throughput in the rock network is a result of fewer cars:
In July we announced that we would reduce the number of rail cars in the South Texas rock network by about 30%. At the time, that network was quite congested, sidings were blocked, and cycle time was significantly higher than it should have been. As we have reported since then, reducing the number of rail cars resulted in a significant improvement in velocity and cycle time that has in turn caused a dramatic increase in throughput. Today we are moving 48% more rock than we were when we made the decision to take the cars out of service.
A number of our customers have worked with us to increase the length of rock trains we move and also to load and unload rail cars on weekends. This has helped improve throughput as well and, because of this, we have returned some cars to service in recent weeks.
While the idea that fewer cars equals more throughput seems counterintuitive, our experience in the South Texas rock network shows that it can do just that.
This approach may help in other areas:
Given this success, we believe this process could help us and our customers in other areas of our system involving some additional equipment types. Reducing the inventory of cars on our network should improve velocity and throughput. We have begun to work closely with some of our customers who use other types of cars, including coal hoppers, flats, boxcars, etc., to see where reductions in cars could increase throughput. Our target is a reduction in our inventory of an additional 4,500 cars this month. Our goal is to haul more business with fewer cars – not less business – and ensure that we have the same success that we did with the South Texas rock network.
West Coast Ports remain busy:
In the international intermodal business, the peak season has caused some delay in moving freight through the ports on the West Coast. We have been able to maintain fluid operations on the West Coast throughout the peak season, and we anticipate that we will be able to continue to do so.
Terminals remain very busy with some delays:
Heavy volumes at terminals in North Little Rock, North Platte, Houston and Kansas City have been slowing the network. Volume relief plans for those terminals are in place to increase the velocity and improve processing times.
Last but not least, there have been a number of recent newspaper articles accusing Union Pacific of being a company willing to put our employees, our customers, and the communities we serve at risk from a safety perspective. You, our long-standing customers, know that’s simply not true. Many of you have participated in safety prevention programs with us. Safety is our number one objective and it always will be.
As we approach the Thanksgiving holiday, we are carefully planning our work schedules to accommodate the holiday plans of our employees while staying absolutely focused on eliminating congestion in terminals as many of our customers shut down for the four-day weekend. To that end, we will be running full out and hopefully will have the chance to use the four-day weekend for some much needed catch up.
We appreciate your continued patience and your business. I hope you and your family and friends have a wonderful Thanksgiving!
