Letter From Jack Koraleski Regarding Rail Service to New Industry Locations

September 14, 2006

Union Pacific is experiencing record demand for rail transportation on its system.  More and more companies are recognizing the value of rail transportation as an economic and fuel efficient alternative to other modes of transportation.   

As a result of growth and expansion in the national economy, Union Pacific is receiving more frequent inquiries concerning rail service to new locations along our network.  During the past year, there have been a record number of requests for rail service to new facilities being contemplated by the shipping community. Consistent with that development, there has also been increased interest in information on how Union Pacific determines the requirements for adding new connections to its network.

Union Pacific welcomes new business opportunities and is willing to explore the feasibility of rail at new locations along our system.  However, not every location along our rail lines is suitable for new rail service.  The physical characteristics of some locations or the nature of our service in some areas of our system preclude additional rail service or make it unlikely that new rail-served locations can be added. While Union Pacific wants new growth and new customers, it is important that new rail-served locations not impede or interfere with Union Pacific's ability to keep its system fluid for the benefit of all its customers.

There are many factors that must be considered in deciding whether or not to add a new rail served location on Union Pacific.  These include terrain, traffic density, existing demand for freight and commuter service along the rail corridor, as well as the nature and complexity of the service Union Pacific is currently providing in the area of the proposed location.   Our ability to deliver on existing service commitments is a key consideration in evaluating new rail service opportunities.

Union Pacific has posted the Guidelines for Rail Service to New Industry Locations (PDF Document)  to inform shippers, developers and governmental entities of the infrastructure requirements for new locations on Union Pacific.  The guidelines also identify those areas on our system where we must limit or manage additional access to our rail system in order to prevent impediments to fluid train operations and service.

The guidelines classify the company's 33,000-mile network into categories based on factors such as the volume of train traffic in the corridor, the capacity of the corridor and other operational complexities.   It also sets requirements for the rail portions of customer facilities, industrial parks and transload complexes.  These guidelines apply to all volumes of business for proposed service, whether it is individual carload or unit train business.

In general, the busier the rail corridor the more extensive the requirements are for customer infrastructure. For example, connections on the company's busiest corridors will require that an entire train be able to clear the main track quickly and without stopping to manually set switches.  On less frequently used corridors, the requirements are less stringent but still require that the connection not cause trains serving that facility to block road and highway crossings.

Union Pacific is committed to grow with our existing and new customers in a manner that supports operational fluidity throughout our network.  To that end, we will continue to work with prospective customers to identify locations that best meet each customer's requirements and are consistent with the operating considerations of the Union Pacific network.  While the final decision to provide service to a new location will be made on a number of factors, these guidelines provide the basic requirements for any potential customer to use in assessing their options for rail service. 

If you have questions about these guidelines or about locating or expanding a business on Union Pacific, please contact your regional Industrial Development representative or your Marketing & Sales contact.