UPS Shifts Freight After Conrail Delays

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Three weeks into the division of Conrail between Norfolk Southern and CSX railroads, incompatible computer systems have caused so many problems that United Parcel Service, their biggest intermodal customer, has pulled 50% of its traffic off both railroads and put it back on the highways.

There also were reports of manufacturing plants closing due to a lack of raw materials caused by rail snafus resulting from the merger. The two Virginia-based railroads paid some $10 billion for the right to split Conrail between themselves.

And while it appeared that no one was panicking, the dreaded reminder of the year-long traffic meltdown that paralyzed the nation’s largest railroad last year, Omaha, Neb.-based Union Pacific, has already been heard.

UPS, which spends more than $500 million a year to move its trucks over various railroads, said it moved half of its normal volume of freight off CSX and Norfolk Southern because of slow trains.

"We started to get worried very early in Week One," said Norman Black, a UPS spokesman in Atlanta. "We very quickly started seeing slowdowns on both railroads. We are seeing delays of three to 12 hours.

"That is unacceptable," he said June 16, "and we still don’t see an improvement."

For the full story, see the June 21 print edition of Transport Topics. Subscribe today.

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