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Article: Union Pacific losing market share over capacity problems.
- Article from:
- Los Angeles Business Journal
- Article date:
- August 1, 2005
- Author:
CopyrightCOPYRIGHT 2005 CBJ, L.P. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Once again, capacity problems are causing Union Pacific Corp. to turn away cargo headed east from local ports.
The bottleneck is the 760-mile "Sunset Route" from L.A. to El Paso, Texas, which the railroad inherited with its purchase of Southern Pacific Rail Corp. a decade ago.
To keep up with demand, Union Pacific needs to add a second set of tracks to more than half the route that doesn't now have them. But the line is saddled with long-term contracts that pay low rates, so Union Pacific can't afford to invest the $600 million it would take to complete the job.
Instead, it is upgrading the line piecemeal, and trains going in opposite ...