Union Pacific is pausing the use of the controversial rail ban for freight

Union Pacific Pause the use of the ban on its freight network, a practice that has increased dramatically this year and prompted the Surface Transportation Board to summon Union Pacific CEO Lance Fritz and other top railroad executives to a hearing in Washington, D.C., earlier this year. the week .

In a letter addressed to STB President Martin Obermann and sent to STB by Fritz on Friday, Union Pacific CEO said, “We are taking a close look at our use of congestion-related bans. To facilitate this close look, we are immediately discontinuing any additional bans under our inventory management program.” Pipelines that we started in November.

According to STB data, rail use of bans to control congestion has increased from a total of five in 2017 to more than 1,000 so far in 2022. Reports have been that the bans are hampering shippers’ operations and adding to supply chain problems for the national economy. Among the reasons why the STB called the hearing.

Union Pacific carries approximately 27% of the freight served by rail and nearly 11% of all long-distance freight volume.

The rail company asserted that given its geographic reach, number of yards, customer facilities, and mix of goods, bans are one of the few tools it has to manage and measure customer-controlled rolling stock levels and relieve network congestion. It also referred to the ban as a “last resort” tool.

The STB has been vocal about its frustration with Union Pacific, stating prior to the December 13-14 hearings that Union Pacific “failed to provide any details” in response to an order from the STB to explain the “dramatic increase in bans since 2017,” including what If UP had maintained enough resources during that time period.

The STB was interested in how UP’s staffing and service levels affected the supply chain and whether labor shortages were part of the reason behind the ban. Unions said that even as the major railway companies added workers, data provided to the STB on employment masks a long-term trend of labor attrition. A labor attorney who testified at this week’s hearing said Class A freight bars may be hiring, but they don’t keep existing workers, so there’s no net gain.

“Instead, they are lengthening trains to sizes beyond the capacity of the infrastructure which increases congestion, rather than adding workers to improve the service,” said Richard Edelman, one of the lawyers representing the rail unions.

CNBC’s review of Union Pacific employment data provided to the STB from January 2019 through October details the date of the employment attrition, a time frame that includes a combination of the publication of the company’s fine-rail strategy called, Consolidated Plan 2020, launched in October 2018 and phased out across The entire Union Pacific rail network. The impact of the Covid pandemic can also be seen in the decline in labor.

According to a Union Pacific spokesperson, the total number of aircraft in use was 27,753 in October 2022 compared to 32,315 in October 2019.

Union membership data shows that hiring at all Tier 1 bars, including Union Pacific, declined from just before the start of the pandemic through between October 2021 and October 2022.