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UP fears cargo congestion
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August 14, 1998: 7:07 p.m. ET
Persistent rail problems and a flood of Asian imports could mean disaster
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NEW YORK (CNNfn) - You could call Union Pacific's southern California facility the heart of the nation's cargo transportation system.
Trucks arrive at the facility, carrying containers full of imported products from the nearby ports of Long Beach and Los Angeles. The containers then wait to be loaded onto rail cars, which send them to retailers.
Last year, this part of the system collapsed as rail shortages, train derailments, labor shortages and bad weather left cargo stranded for weeks.
Now, despite spending hundreds of millions of dollars to upgrade its system, Union Pacific is again experiencing cargo delays -- of up to four days.
Michael Furtney, a spokesman for Union Pacific, said the company is working on the problem of backed-up cargo. "It's an on-going day-to-day effort to make sure we are doing the best we can to meet our customers' schedules," he said.
This time, the main problem is too much business. The Asian economic crisis has swelled imports to the United States. And Asian manufacturers desperate for hard currency are shipping holiday merchandise early. Southern California ports are setting new records for inbound cargo every month.
Albert Fierstine, director of business development at the Port of Los Angeles, said port officials' biggest worry now is performance. "That they (Union Pacific) perform for us, that's my biggest concern," he said. "Because if they are not able to handle the cargo, we're not going to be able to handle the cargo."
Los Angeles and Long Beach have already lost business to less-congested ports. Hal Hillard, marketing manager at the Port of Long Beach, said port officials need to be on top of things. "We have to be cognizant of the fact that if we do have more problems this fall, we could lose more cargo," he said.
Union Pacific also has lost business to truckers and other railroads, but the company said it is winning some of that business back.
So far there are no signs port congestion this year will be as bad as it was last year. But with the nation's cargo transportation system already operating at near full capacity, any rail system breakdown could be devastating. 
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Union Pacific
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