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Sunday, January 24, 2021

North Platte retains vital role in Union Pacific operations

NORTH PLATTE, Neb. (AP) — A North Platte without Bailey Yard would seem almost incomprehensible.

Not quite as unimaginable, perhaps, as a city without any trace of the Union Pacific Railroad that platted it and made it a key servicing center from its moment of birth.

But the presence of the world’s largest rail classification yard, which evolved between 1948 and 1980, has long been deemed powerful insurance that the city and Union Pacific will remain linked as long as railroads run.

The evidence supports that belief even with U.P.’s systemwide elimination of thousands of full-time-equivalent jobs during 2019, says Gary Person, president and CEO of the North Platte Area Chamber & Development Corp.

Even with the impact of the Unified Plan 2020 efficiency drive, a key U.P. leader told him recently that “when you look at their entire system across the nation, 10% of it is at Bailey Yard,” Person said.

“Therefore, it remains a critical part of their operation. Look at the other yards that have closed. That just makes this a lot more valuable.”

The North Platte Telegraph reports anxiety grew among U.P. families and other residents as Bailey Yard’s workforce shrank by some 250 jobs last year, based on local estimates.

Even so, the railroad remains North Platte’s largest employer — with something around 2,000 jobs today — as it has been since track gangs building America’s first transcontinental line arrived in November 1866.

Bailey’s 2,850-acre area and daily volume of 14,000 railcars remain exponentially larger than the other seven remaining major classification yards in U.P.’s 23-state network.

And in the northern half of that network — the part accounting for most of U.P.’s overall footprint before its 1996 merger with Southern Pacific — Bailey Yard remains one of a kind.

It was the vast expanse of the valley near the forks of the Platte River that led Grenville M. Dodge, U.P. chief engineer during the 1865-69 construction period, to plat North Platte as a railroad “division point.”

The geography behind Dodge’s decision and Bailey’s post-World War II development hasn’t changed, Person said.

“Why is it here?” he said. “Location, location, location.”

A July 18 statement by Union Pacific chief operating officer Jim Vena during a quarterly shareholder “earnings call” reiterated Bailey’s long-term importance to the railroad.

“I think North Platte is going to be there for a long time. We’re asking it to work harder, though,” Vena told the call’s listeners.

“We’re putting more rail cars in there, and the cars they have, they (the workers) have to do them efficiently and we move them out.

“They are setting records today on how fast they are able to switch cars and get them through the complex. I expect that to improve substantially. We’ve got some smart people out there who are able to do that.”

A major impetus behind Unified Plan 2020, U.P. spokeswoman Raquel Espinoza said, was that “our operating plan made it difficult to meet shipment arrival times” before the plan was unveiled in October 2018.

To better meet customer expectations, she said, the plan shifted the railroad’s operational focus from trains to rail cars.

Trains grew longer as locomotives were idled, and U.P. has run fewer “unit trains” of a single type of rail car — such as coal trains to and from Wyoming’s Powder River Basin — in favor of more “mixed trains” assembled to bypass at least some yards.

Espinoza said the plan’s first-year success can be measured by U.P.’s system-wide “car trip plan compliance,” a measure of rail car arrival times. It rose from 67% in the last quarter of 2018 to 76% a year later.

Over the same period, U.P. reduced the time shipments sat idle in rail yards by 13%, she said.

But last year’s closure or curtailment of smaller “hump yards” — and the high-profile suspension of construction on a new one — were driven in some cases by both traffic and proximity, Espinoza said.

Neff and Armourdale yards in the Kansas City area, shut down in October and January respectively, were only 10 miles apart. U.P. transferred their functions to a third Kansas City yard, the 18th Street Yard.

A similar shift took place in Houston, where Englewood Yard picked up much of the switching operations of Settegast Yard, also only about 10 miles away.

Davidson Yard in Fort Worth, Texas, also is no longer performing humping operations.

But 2019’s most notable shift in U.P. strategy was April’s halt in building the $550 million Brazos Yard between Dallas and Houston.

Brazos, slated to cover 1,875 acres, represented U.P.’s largest single planned capital investment in its history when work started in January 2018, the railroad said at the time.

But though Brazos would have been “one of the highest capacity yards” on the U.P. system, its estimated sorting capacity of 1,300 cars per day would have been less than 10% of Bailey Yard’s average volume.

“Brazos Yard is a good example of how plans change based on operating and customer needs,” Espinoza said.

The U.P. spokeswoman said a Jan. 23 Wall Street Journal story incorrectly interpreted the railroad’s public employment figures to mean U.P. expects another round of substantial job cuts in 2020.

Railroad officials said during their most recent earnings call that they expect the system to average 34,500 full-time equivalent jobs this year, Espinoza said.

That compares with full-year FTE averages of 41,967 in 2018 and 37,483 for 2019, as reported in U.P.’s 2019 annual report to the U.S. Securities and Exchange Commission.

But Espinoza said the railroad’s FTE average for 2019’s final quarter totaled 34,563, only slightly above the 34,500 estimate for all of 2020.

She declined to discuss expectations for Bailey Yard employment this year, citing U.P.’s policy against providing location-specific numbers.

But even with last year’s changes under Unified Plan 2020, “hump yards make sense when they efficiently handle a lot of cars that have to be there,” Espinoza said.

Person, who just finished a three-year term on the LincUP board of community members and Bailey Yard leaders, said North Platte’s long record of success as the U.P. system’s linchpin bodes well for its long-term future.

“You’ve got a lot of pride at Bailey Yard,” he said. “Those guys have the most efficient yard in the U.P. system. …

“They actually compete with other yards in the system, and the more efficiency they have, the more traffic they get through here.”

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