The Surface Transportation Board has ordered Union Pacific to improve its service to chicken farms in California.
Foster Poultry Farms, a chicken grower and processor, told STB last Wednesday that since February, it has had challenges getting the animal feed it needs from the Midwest to the company’s facilities in Traver and Turlock, Calif.
UP’s service failures “have resulted in numerous instances where Foster Farms has suspended its production and distribution of feed for tens of thousands of dairy cattle and tens of millions of chickens and turkeys which consume corn meal supplied by Foster Farms,” the company said. “It has also resulted in Foster Farms incurring considerable costs in an increasingly desperate and futile attempt to try to find alternative means and transportation modes to obtain and ship the huge quantities of corn its facilities must have each week.”
Because of these service failures, the processor asked the board last week to order UP (NYSE: UNP) to prioritize the movement of 100-car unit trains of corn to Foster Farms’ facilities — and STB agreed to Foster Farms’ request, according to STB’s decision rendered Friday.
An emergency service order requiring UP to address service issues “is warranted. … The board’s directive is intended to alleviate Foster Farms’ immediate service problem while the board considers the remainder of Foster Farms’ petition,” STB said.
The service improvements, which UP suggested in a Thursday response to Foster Farms’ complaint, include prioritizing the assignment of crews to Foster Farms’ unit trains at loading origins; prioritizing Foster Farms’ unit trains on UP system, with a goal of minimizing the extent that crews enter into “time out” under hours of service rules so that a train can move from origin to destination without stopping; and assigning and retaining sufficient locomotives to Foster Farms’ trains at loading origins so that there is sufficient locomotive power for the unit train to make its trip to Foster Farms’ California facilities.
UP will also provide STB with daily status reports for 30 days. These reports will include the number of trains and cars billed to Foster Farms’ two facilities and actual performance data versus trip plan data for these shipments.
“Foster Farms is a vitally important Union Pacific customer. However, we have failed to provide adequate service to Foster Farms,” UP President and CEO Lance Fritz wrote in a Thursday letter to the board. “I am writing to convey Union Pacific’s firm and clear commitment to providing Foster Farms the service it deserves and the service we expect to provide. I am personally working directly with Foster Farms’ leadership to understand their concerns and meet their needs.”
Foster Farms’ request comes as the board has been seeking to hold the railroads accountable for service disruptions following shipper complaints earlier this year. UP, BNSF (NYSE: BRK.B), CSX (NASDAQ: CSX) and Norfolk Southern (NYSE: NSC) have been engaging with the board and providing regular service updates as part of a wider effort to improve rail service.
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