Union Pacific (NYSE: UNP) confirmed that it is slowing down its pace of construction at the multi-million dollar Brazos classification yard in Robertson County, Texas. This comes amid UNP’s plans to implement precision scheduled railroading (PSR) and modify its operating plan to minimize railcar classification events.
UNP “has slowed the pace of construction as we evaluate customer needs and the efficiency of our rail network, including Brazos Yard,” UNP spokesperson Kristen South said. “This review is occurring throughout the 23 states we operate as we implement Unified Plan 2020, which is designed to ensure safe, reliable and efficient service.”
Announced in January 2018, UNP planned for the Brazos yard to be one of the highest capacity classification yards in its network, with the ability to switch up to 1,300 railcars per day. A classification yard is a facility in which a rail carrier separates and sorts rail cars by destination. The carrier then assembles new trains. UNP anticipated that cross-border traffic, petrochemicals, plastics and consumer goods companies would benefit from the rail yard.
UNP expected to spend around $550 million on the facility, and construction was expected to be completed in 2020.
But UNP now says it doesn’t have an updated timeline for completion.
UNP has yet to announce what capital projects it plans to focus on this year in its 23-state network, but the company could provide further details in several weeks when it releases its first quarter results on April 18.
The change in construction pace comes as UNP transitions to PSR while also implementing Unified Plan 2020, an operating plan announced in September 2018. A key objective of the plan is to reduce a railcar’s dwell time, or the time that an empty or loaded railcar sits at a terminal until the railroad moves it towards its destination.
Unified Plan 2020 seeks to meet other objectives, including making service more reliable and predictable and improving the availability and utilization of crews, locomotives and other assets. UNP is implementing its version of PSR in stages. The rollout first occurred on the company’s north-south corridor between Wisconsin and Texas. The company expects to have PSR running throughout its whole network by 2020.
