STB issues findings in review of UP's embargo use

The Surface Transportation Board yesterday announced findings and closed a proceeding involving a December 2022 hearing to examine Union Pacific Railroad's use of embargoes to relieve traffic congestion on its network.

The STB held the hearing out of concern over the impact that the embargoes were having on the Class I's customers and the national rail network. The board learned that UP used more than 1,081 embargoes in 2022, nearly 10 times as many as any other railroad. In 2017, UP instituted five embargoes; that number rose to 304 in 2019, according to the STB's decision.

The board determined that UP's excessive use of embargoes coincided with its significant cuts in the train-and-engine workforce; modifications of its customer inventory management systems program; customers' excess freight-car inventory; and implementation of private-car pipeline management program (PCPM).

After the December 2022 hearing, the Class I made changes to its embargo-related practices. Shortly after the hearing, UP informed STB Chairman Martin Oberman that the railroad would immediately pause any additional embargoes under the PCPM program.

In April 2023, UP submitted an update outlining its actions to improve customer visibility; provide customers additional time, under certain circumstances, to resolve identified issues; include a clearer, shorter expiration date for embargoes; launch a proactive customer engagement plan to ascertain operational and other adjustments; and increase the carrier’s industry spot and pull threshold before it engages a customer.

Those and other changes, along with an increase in the T&E workforce, dropped the use of congestion embargoes to 181 in 2023, according to the STB's decision. Still, the number used in 2023 exceeded the number issued by all other Class Is combined, the board noted.

"The board therefore expects UP, notwithstanding the closure of this proceeding, to continue to work to reduce and minimize its use of congestion embargoes going forward," the decision states. "The board will continue to monitor UP's progress in this regard."

Click here to read the board's entire decision.