03 August 1998 00:00 [Source: ICB Americas]By Don Richards
Union Pacific Corporation, which says it is making steady progress in restoring on-time rail service in the Texas-Gulf Coast area, has settled a lawsuit with Dow Chemical Company.
The Midland, Mich., firm sued UPRR last March, claiming it had lost more than $25 million and asking for damages caused by poor service. Dow alleged that only 12 percent of its products were reaching destinations on time (CMR, 3/23/98, pg. 37).
Dow is reportedly satisfied with the settlement and says deliveries have improved. UPRR says the settlement will be paid with part of a $155 million after-tax charge taken in the second quarter.
Also included in that charge was the railroadÕs earlier settlement with DuPont, as well as numerous smaller claims. UPRR is expected to settle a suit with Union Carbide in the coming weeks.
Several lawsuits are still pending against the railroad, including those filed by UPRR shareholders, Phillips Petroleum Company and Entergy Corporation. Although rail service on the nationÕs largest system appears to be improving, Secretary of Transportation Rodney E. Slater wants federal controls to remain in place on the line.
UPRR has operated under the Surface Transportation BoardÕs scrutiny for six months. The board imposed restrictions on the railroad that are set to expire August 2.
According to UPRRÕs latest report to STB, problems persisted in the west, but service for Gulf Coast shippers continued to improve steadily during the week that ended June 17.
The Texas-Louisiana car inventory remained below 100,000 for the fourth week in a row, even though UPRR is holding almost 8,000 SIT (storage-in-transit) hopper cars of plastic pellets, as demand for plastics appears to be softening. This is 1,500 more SIT cars than normal.
Burlington Northern Santa Fe Railway is refusing to accept additional SIT cars from shippers on the Port Terminal Railway Authority (PTRA) in Houston, indicating that it, too, may be facing a glut of these cars.
DEWEY MARK: R. Dewey Mark, an icon in the US petrochemical and petroleum industry for nearly 50 years, died May 23 in San Antonio. He was 73 years old.
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