Union Pacific defends rail safety program

Union Pacific wants to know what safety defects federal inspectors say they found when conducting focused inspections last month at the Class I railroad’s rail yard in North Platte, Nebraska.

UP CEO Jim Vena said in a letter Monday to Amit Bose, administrator of the Federal Railroad Administration, that the railroad “will never compromise on the safety of our employees. We take the concerns raised very seriously and are confident we have the people and practices in place to responsibly maintain our locomotives and car fleets.”

Bose had sent a letter to UP (NYSE: UNP) leadership on Friday admonishing the rail carrier for numerous defects he said were found during the inspections of UP’s locomotive and fleet maintenance program in July and August. Bose said he had “serious concern[s]” about how UP handles rail safety, pointing out that “the compliance of the rolling stock (freight cars and locomotives) on the UP network is poor and UP was unwilling or unable to take steps to improve the condition of their equipment.”

Bose’s letter also questioned whether those defects were related to the recent furloughs of 94 craft employees.

Copies of both letters were sent to Surface Transportation Board Chairman Marty Oberman.

Vena pressed the FRA for more details about its findings beyond what was mentioned in Bose’s letter.

“Typically, inspections by the FRA include a focused audit close out with clear findings and action steps, as well as a meeting to discuss any findings and mitigation approaches. Our team has not received an audit close out, which will help us more quickly address the issues raised,” he said.

Vena asked the FRA to clarify what defects were found on the locomotives as well as the magnitude of defects, saying that defects can range from something as minor as an amnesty lock on a bathroom door to something that would have a higher impact, such as a high flange wheel. He also asserted that the FRA investigation involved only 10% of the overall UP fleet maintained on Sept. 1.

Vena defended UP’s actions when FRA inspectors sought to inspect certain areas at the North Platte yard, saying that the perceived resistance was so the railroad could keep inspectors safe as well as ensure that operations would keep running as inspections were occurring.

“When unscheduled audits occur in railyards, it is standard procedure to work with FRA inspectors to ensure the location of the inspections doesn’t cause safety risks for inspectors or employees, or create service interruptions for our customers,” Vena said.

“It is very common at a location like North Platte to ask the inspection team to go to a different part of the yard if inspections are becoming impactful to service or placing the inspectors at risk,” he continued.

Vena reiterated that the furloughs of craft employees across UP’s system were the result of lower business volumes, which translates into putting more equipment into storage.

“There is no correlation between recent furloughs and Union Pacific’s ability to address mechanical repairs. … Mechanical employee-to-car and locomotive ratios are in line with our own long-term trend, as well as those across the industry,” he said.

Vena indicated that UP and the FRA would be meeting in October, when the railroad will provide an update on an internal review of its daily repair process.

He wrote that the “Union Pacific team works hand-in-hand with FRA inspectors toward shared safety goals, and we respect that partnership. We look forward to receiving and examining the details of your findings while we continue conducting an audit of our processes.”

The FRA and U.S. Department of Transportation have been under pressure to take a more proactive stance to bolster rail safety following the Feb. 3 derailment of a Norfolk Southern train in East Palestine, Ohio.

Meanwhile, STB’s Oberman and railroad unions have put pressure on UP in recent years over possible correlations between reductions in employee head count and deteriorating rail service.

According to the FRA, the focused inspections that occurred at UP over the summer were a type of inspection performed routinely. These types of inspections are generally centered on a single discipline, such as track, mechanical equipment, operating practices or signals, and the focused inspections may just hone in on one part of the railroad, such as a specific geographic territory, or it might be systemwide. The focused inspections might be triggered by data trends identified by FRA, such as an increase in defects or violations, and the intent is to assess and bring a railroad into full compliance with federal regulations.

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