UP’s Weather Battle Shifts to the North

(UP Photograph)

Tough May weather in Texas, Arkansas and Louisiana plunged Union Pacific’s (UP) network velocity to a five-year low of 22.7 mph in the week ending June 7 and, after a modest uptick in speed in the subsequent week, flooding and related track washouts in Iowa and Minnesota have forced average train speed back to 22.7 through June 21.

There’s better news in terms of critical resource availability as we’ve entered peak crew vacation season between June 22 and July 14, with trains holding for crews sitting at an acceptable 13 per day in the week ending June 21. Trains holding for power came in at 12 per day, a deterioration from six per day the week prior.

With regard to the subcomponents of the velocity metric, intermodal fell to a 10-month low in the week ending June 14 and stayed there through June 21. While this isn’t great, it’s still better than UP’s manifest and auto networks that have taken a bigger speed hit from the recent weather challenges, albeit both are now off their recent lows.

The proportion of UP’s car fleet sitting idle for 48 hours or more upticked from 1.5% to 1.6% in the week ending June 21. This is only a little above the year-to-date (YTD) average of 1.5%, so of no concern.

Significant weather effects and derailments show up in trains per day holding for reasons other than power and crews, and this metric has told the story. The May storms in the southeast of UP’s network sent this metric from 30 to 52 per day by late May, which then retreated to 28 by mid-June, after which the Iowa and Minnesota flooding pushed it back up to 35 per day last week.

Crucially, full system terminal dwell has continued to be relatively unaffected by all the May/June weather drama.

Last week, given the weak velocity and impending peak crew vacation season, UP was basically one I-5 corridor bridge fire away from a meltdown. The company coincidentally discussed this wildfire risk to its infrastructure in its employee newsletter.

We’ll also take this opportunity to show the operational landscape for the rest of the year in the graphic below. You can see the traditional seasonal speed boosts from the major public holidays in addition to the seasonal risks. We’re now entering a period where two significant risks to operations overlap: fires and crew vacations.