Railroad’s fuel lessons pay off

first_imgThe first quarter of 2006 saw Union Pacific haul more freight than a year ago while using roughly the same amount of fuel – a first for the company. The railroad hauled about 2 percent more freight during the first quarter of this year while using 345 million gallons of fuel, which is up only slightly from the 344 million gallons used during last year’s first quarter. Encouraging engineers to change the way they drive is one part of Union Pacific’s efforts to conserve diesel. The railroad also invested in about 1,900 fuel-efficient locomotives since 2000 and overhauled an additional 1,300 of its older units to be more efficient. UBS analyst Rick Paterson said all railroads are taking similar measures because fuel costs can erode profits. The nation’s second-largest railroad, Burlington Northern Santa Fe Corp., also teaches its engineers techniques to help conserve diesel, spokesman Steve Forsberg said, but it doesn’t offer financial incentives to employees. The Fort Worth, Texas, railroad has also bought more than 2,500 new locomotives over the past few years, Forsberg said. To help recover the soaring cost of fuel, Union Pacific has surcharges in most of its contracts. Still, diesel is a significant expense for the railroad, which last year spent nearly $2.6 billion on fuel and utilities. Union Pacific used about 1.35 billion gallons of diesel in 2005. Railroad customers have complained that the surcharges don’t reflect the costs of individual shipments, and that railroads don’t provide enough information about the surcharge formulas. Kendell Keith, president of the National Grain and Feed Association, testified at the Surface Transportation Board’s recent hearing on surcharges that railroads ought to be more transparent about what the charges are based on and the formulas should be revised. “Some shippers are really being gouged by the structure of these surcharges,” said Keith, who represents about 900 businesses involved in storing and shipping grain. Union Pacific officials maintain that the railroad’s surcharges are not excessive because they recover about 90 percent of the railroad’s costs above 75 cents per gallon. Paterson said that industrywide, railroads recover about 75 percent of their costs when the price of diesel increases. The industry didn’t start adding surcharges until 2002, so any contracts older than that still don’t have them.160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! OMAHA, Neb. – When a new Union Pacific engineer starts training, the student practices in a locomotive simulator. At first, a trainer lets the student drive the virtual train 20 miles without much instruction. Then the education begins. The lessons are important because engineers significantly affect how much fuel is burned by the railroad’s 8,000 locomotives. And that adds up quickly, because the railroad burns about 3.25 million gallons of diesel a day. AD Quality Auto 360p 720p 1080p Top articles1/5READ MORE11 theater productions to see in Southern California this week, Dec. 27-Jan. 2Brad West and Jay Canaday teach their fellow engineers some techniques that sound familiar to motorists facing gasoline price spikes and concerns about gas mileage. Strategies such as accelerating slowly, limiting time spent idling and trying to anticipate conditions ahead are just as useful on rails as on highways. But the most important lesson for engineers is also one of the simplest: “You let gravity do a lot of work for your train,” West said. Last year, Union Pacific’s program to encourage engineers to conserve fuel helped the railroad save 16 million gallons of diesel and $30 million. And that’s with only about half the engineers participating. last_img read more