NEW YORK - Construction is proceeding on Union Pacific's new hump yard project in Texas. The railroad announced that it will be using the rail yard differently than originally envisioned due to Precision Scheduled Railroading. Union Pacific is spending $550 million to develop
Brazos Yard near Hearne, Texas, where a strategic junction exists between seven UP main lines. The yard is scheduled to open by the end of the yard and construction was under way eight months prior to the October launch of UP's new Precision Scheduled Railroading plan.
Union Pacific's new plan for Precision Scheduled Railroading is based off of E. Hunter Harrison's use of PSR. This plan calls for a reduced emphasis on major terminals as cars are pre-blocked at origin and sent further into the railroad network before being switched at a yard. This reduces costs and can improve service reliability if it is executed properly. As a result of the reduced need for yard capacity, UP is rationalizing some of it's local yards. A hallmark of Harrison's tenure as an executive at Canadian National, Canadian Pacific, and CSX Transportation was reducing the number of hump yards and converting them to flat-switching facilities.
Union Pacific has already proceeded to consolidate yards in the Salt Lake City area, and CEO Lance Fritz noted that they are working to do the same in Kansas City. "Obvious" opportunities for yard rationalization exist in Pine Bluff, Ark. - which is also home to a hump yard - and at facilities in the Pacific Northwest.
Because of the reduced car-handling under its new operating plan, UP reviewed Brazos to determine whether construction work should be halted, but Fritz noted on Wednesday that new COO Jim Vena, who worked with Harrison at CN and joined Union Pacific in January, brings a fresh set of eyes to the railroad. Vena is challenging certain long-held operational assumptions at UP and is reviewing the railroad's terminals as he travels the system.
UP may hire more people with PSR experience in the near future.
"I wouldn't be surprised if we find one or two other kind of executive-level individuals who can help us over the long run," Fritz says.