Bayer Motor Co. Inc.
 
Glickman "Dismayed" At UP’s
Embargo On Mexico Shipments

WASHINGTON —(AP)— Bridling at Union Pacific Railroad's decision to temporarily suspend rail shipments to Mexico through its Laredo, Texas gateway, Agriculture Secretary Dan Glickman is urging federal regulators to step in and block the action.

The nation's largest railroad, which has been struggling for months to resolve persistent congestion problems in Texas and elsewhere, announced last week that it would stop accepting some new shipments for delivery into Mexico through Laredo until the gridlock is ended.

Glickman pronounced himself "dismayed" Thursday by the move and urged the federal Surface Transportation Board, which has oversight of the nation's railroads, to block the action.

"While there are undoubtedly occasions when, for safety or operational reasons, it is necessary to embargo traffic, no carrier should have the ability to unilaterally restrict the international trade of the United States as the (railroad) now threatens to do," Glickman said in a filing with the STB.

The railroad, which is a unit of Dallas-based Union Pacific Corp., said it will embargo all new shipments traveling southward through Laredo, except automobiles and auto parts, as of Saturday. More than half of the railroad's traffic to and from Mexico moves through Laredo.

"The embargo for us was a last resort," said railroad spokesman Mark Davis, declining to estimate how long the action is expected to last.

The railroad, which typically has 3000 rail cars going south through Laredo, now has 5500 cars in the pipeline — some stalled as far north as Oklahoma and Kansas because of the Mexican congestion.

The main products affected by the embargo are chemicals, agricultural goods, coal and industrial products, Davis said.

Union Pacific, which is operating under an emergency service order imposed by the Surface Transportation Board, reported to the regulators this week that the Laredo congestion "has become a major transportation emergency for UP and its shippers."

The railroad blames the gridlock on a Mexican railroad that connects with the Laredo gateway.

Glickman questioned Union Pacific's action, saying "other carriers involved dispute the need for an embargo."

But, said Davis: "Once you get congestion in the pipeline, you don't want to keep building on that because it will spread across your entire system."

Union Pacific's woes began last summer with gridlock in the Houston area that quickly rippled throughout the railroad's 36,000-mile network, harming shippers from the West Coast to the Gulf Coast.

After the railroad proved unable to solve its intractable problems quickly, and with shippers, the Texas Railroad Commission and others complaining bitterly about mounting economic losses, the STB last October put in place emergency measures designed to lessen the congestion.

This week, the board is scheduled to hold two days of hearings on rail competition and access issues.




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