Executive Briefings

Union Pacific CEO: Train Braking Technology Is Clogging the Railway

Union Pacific Corp. says new technology meant to prevent train accidents is causing congestion on the railway.

The largest U.S. railroad based on revenue is in the midst of implementing positive train control, or PTC, technology, which is designed to automatically stop a train to prevent collisions or derailments. But activating the system in certain areas is causing problems as the railway works out kinks in how it operates.

“As we turn on more of our footprint, that requires us to debug and learn the system,” CEO Lance Fritz said in an interview last week, adding that sometimes the new technology “makes a train stop where it’s not supposed to stop.”

Fritz said the problems have contributed to a slowdown in the network recently, including trains running 5-percent slower and spending 12-percent more time in terminals during the fourth quarter. Problem spots are in Chicago, Kansas City and Houston.

Certain areas also have seen a buildup in inventory and the railroad is unable to keep up, he said. “We’re not executing our game plan like we have historically.”

U.S. railroads have spent most of the past decade implementing PTC, which the industry estimates will cost around $10bn to install and another $500m to maintain annually. Congress has pushed the deadline to complete installation to the end of 2018.

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The largest U.S. railroad based on revenue is in the midst of implementing positive train control, or PTC, technology, which is designed to automatically stop a train to prevent collisions or derailments. But activating the system in certain areas is causing problems as the railway works out kinks in how it operates.

“As we turn on more of our footprint, that requires us to debug and learn the system,” CEO Lance Fritz said in an interview last week, adding that sometimes the new technology “makes a train stop where it’s not supposed to stop.”

Fritz said the problems have contributed to a slowdown in the network recently, including trains running 5-percent slower and spending 12-percent more time in terminals during the fourth quarter. Problem spots are in Chicago, Kansas City and Houston.

Certain areas also have seen a buildup in inventory and the railroad is unable to keep up, he said. “We’re not executing our game plan like we have historically.”

U.S. railroads have spent most of the past decade implementing PTC, which the industry estimates will cost around $10bn to install and another $500m to maintain annually. Congress has pushed the deadline to complete installation to the end of 2018.

Read full article