STB Closes UP Embargo Docket

Union Pacific photo.

The Surface Transportation Board on April 17 issued findings and closed its proceeding in Oversight Hearing Pertaining to Union Pacific Railroad Company’s Embargoes, Docket No. EP 772. STB noted that “UP’s effort to [dramatically] reduce its use of congestion embargoes is a positive and welcome step,” but added the agency “will continue to monitor the railroad’s use of embargoes.”

The decision “explains the Board’s review of UP’s embargoes and the Board’s conclusions based on that review,” STB said. It also “points out UP’s repeated and extended failure to provide the Board with information in a timely and responsive manner during this proceeding. While the Board recognizes that UP has made numerous changes to its embargo-related practices and reduced its use of embargoes, the number of embargoes UP issued in 2023 still exceeded the number issued by all other Class I railroads combined. The Board expects UP to continue to reduce and minimize its use of embargoes and will monitor its progress.”

In December 2022, STB held a public hearing to examine UP’s use of more than 1,000 embargoes to relieve congestion on its network, “nearly ten times as many embargoes as any other railroad,” the agency noted. “The Board convened the public hearing out of concern about the impact that these embargoes were having on UP’s customers and the national rail network.”

“As a general matter, the Board … notes that the UP’s embargo-related practices, at the start of this proceeding, did not appear to fully account for carrier-caused problems and did not factor in relevant conditions of a yard or line, and these practices were exacerbated by UP’s reductions to its T&E workforce and by limitations with the carrier’s prior visibility measures,” STB wrote in its decision. “Without deciding whether these prior practices violated applicable statutes, or prejudging the reasonableness of any future embargo issued following changes made by UP … the Board urges UP and all other carriers not to adopt embargo practices that fail to account for carrier-caused problems and relevant physical conditions, and to maintain T&E workforces—as well as levels of employment of other categories of workers and other resources—necessary to satisfy their common carrier obligation without unreasonable reliance on embargoes.”

However, in conclusion, STB said, “Encouragingly, following the Board’s institution of this proceeding in late 2022 and the airing of these issues in the December 2022 hearing, UP made changes to its embargo-related practices. Shortly after the hearing, UP’s then President and CEO [Lance Fritz] wrote to Chairman Oberman that the carrier would immediately pause any additional embargoes under the PCPM (Private Car Pipeline Management) program … In April 2023, UP submitted an update outlining its actions to (1) improve customer visibility; (2) provide customers additional time, under certain circumstances, to resolve any identified issues; (3) include a clearer, shorter expiration date for embargoes; (4) launch a proactive customer engagement plan to ascertain operational and other adjustments; and (5) increase the carrier’s industry spot and pull threshold before it engages a customer. The Board understands that UP has also implemented changes to account for its overall trip plan compliance and to ascertain whether the serving yard was congested based on total inventory, not just customer-specific numbers.

“These changes, along with an increase in its workforce and improved service, dropped the use of congestion embargoes precipitously, from 1,081 in 2022 to 181 in 2023. This represents a more than 80% reduction in UP’s use of congestion embargoes from the previous year. UP’s effort to [dramatically] reduce its use of congestion embargoes is a positive and welcome step. In light of that dramatic reduction, we conclude that this proceeding has served a useful purpose and can be closed. We do note, however, that even after the significant reduction in UP’s congestion embargoes from 2022 to 2023, the 181 congestion embargoes issued by UP in 2023 still exceeded the number issued by all the other Class I railroads combined. 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.”

Download Oversight Hearing Pertaining to Union Pacific Railroad Company’s Embargoes, Docket No. EP 772: