Midwest lawmakers call on regulators to halt Union Pacific embargoes

Eight members of Congress representing districts in Iowa, Minnesota and Wisconsin want the Surface Transportation Board to compel Union Pacific to lift weather-related embargoes in their states.

A Jan. 13 letter addressed to STB Chairman Marty Oberman asks the agency to “exercise its statutory oversight authority” and conduct a forum that would involve UP and affected rail shippers and result in UP lifting its embargoes.

UP placed a temporary embargo on operations in Iowa, Minnesota and Wisconsin in late December amid severe weather events and arctic temperatures. That embargo started on Dec. 29 and was to last an estimated 14 days. A Jan. 11 update said the embargo would remain in place another estimated 14 days amid continued severe weather and extreme cold.

The lawmakers’ letter also said UP has been able to manage service successfully in previous winters under similar weather conditions.

“The delays resulting from Union Pacific’s embargo and subsequent inadequate service for their customers is unacceptable. Current and forecasted weather conditions in the upper Midwest are not abnormal for this time of year, and similar conditions in the past have not significantly disrupted rail service,” the letter stated, adding that farmers, biofuel producers and manufacturers are being affected by the embargoes. “We have urged Union Pacific to address this as quickly as possible as the embargo will result in increasingly devastating effects on American industry in the upcoming days and weeks if not quickly resolved.”

But UP defended its use of embargoes in the Midwest, telling FreightWaves that it “has experienced significant weather delays since December due to severe winter storms and arctic temperatures in the Midwest. Although incremental progress has been made in reducing congestion across the region, we are seeing longer than anticipated recovery due to the magnitude of weather impacts. We will continue to issue permits for all customers during this recovery period to protect critical supply chains.”

The lawmakers’ request that STB order UP to restore service is not the first of its kind. In June and December 2022, STB charged UP through emergency service orders to fix service to California chicken processor Foster Farms, which had told the board about its challenges receiving animal feed in a timely fashion. UP and Foster Farms subsequently said in January that enough feed has been delivered, according to media reports.

UP has gotten heat from rail shippers and STB for its use of embargoes, which grew exponentially in 2022. The board conducted a hearing in December on the issue, with some rail shippers questioning whether UP was fulfilling its common carrier obligation because of the increased use of embargoes. The common carrier obligation binds freight railroads to deliver freight per federal law, although shippers have contended that the common carrier obligation doesn’t define clearly what that rail service entails.

Republican lawmakers signing the letter were Minnesota Reps. Brad Finstad and Michelle Fischbach; Iowa Reps. Randy Feenstra, Ashley Hinson, Mariannette Miller-Meeks and Zach Nunn; and Wisconsin Rep. Tom Tiffany. Democrat Rep. Angie Craig of Minnesota also signed the letter.

Subscribe to FreightWaves’ e-newsletters and get the latest insights on freight right in your inbox.

Click here for more FreightWaves articles by Joanna Marsh.